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INDUSTRIAL FINANCIAL AND POLITICAL 



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LETTERS 



HON. HENRY WILSON, 

SENATOR FKOM MASSACHUSETTS. 



BY 

H. 0. OAEET. 






PHILADELPHIA: - 
COLLINS, PRINTER, ^05 JAYNE STREET. 
1867.. 



LETTEES TO THE HON. HENHY WILSON, 

SENATOK FUOM MASSACHUSETTS. 



LETTER FIRST. 



Dear Sir: 

In the recent Address at Saratoga your hearers were told that 
you were " accustomed to take hopeful views of public affairs ;" 
that "during the darkest hours of the war" you had had "faith 
in the country, faith in our democratic institutions," and had 
"never doubted the result;" that, "since the close of the war," 
we had had "trials quite as severe," but you had "never had any 
doubt" that that result was "to be a great and united nation." 
Continuing on in the same direction, you spoke as follows: — 

"We have passed through a bloody struggle. I am among 
those who believe that it was inevitable — that it was one of the 
great wars of the human family. It was a struggle on this conti- 
nent between the democratic ideas of the Declaration of Independ- 
ence and the system of human bondage, and in such a contest 
there could be no doubt of the resulv. We who stood by our 
country, and the cause of liberty, justice, and humanity, have tri- 
umphed. We have triumphed at a fearful cost. We are proud 
and strong; we have lifted the country \oward the heavens; we 
are a greater people than ever before. We have destroyed human 
bondage ; we have subjugated and conquered a brave and heroic 
portion of the country, and now the great work is done, I am for 
welcoming them back with warm and generous greetings, trusting 
that the causes of all our troubles have passed away forever, and 
that hereafter in the future we shall be friends and brothers as we 
were in the morning of the Republic." 

The anticipations here presented are most pleasant and agree- 
able, and gladly would I accept them as likely to be realized were 
it possible for me so to do. That I do not, is duo to the plain and 
simple fact that sad experience is now teaching the farming and 
mining States that for them the only "result" thus far recently 
achieved has been that of a change of masters, Massachusetts 
having, so far as regards matqrial interests generally, taken the 
place of South Carolina, and Kew England at largo, in reference 
to some of high importance, that of the States so recently in re- 



bellion. Power has gone from the extreme South to the extreme 
North, and the sectionalism of to-day is likely, as I think, to prove 
quite as injurious as has already proved that of the past. 

This, I pray you, my dear sir, to believe, is said in no unfriendly 
spirit. No one more than I respects the great mass of the people 
of Massachusetts. Few have given more full expression to their 
admiration of the estimable qualities by which New England peo- 
ple generally are so much distinguished. It is because of my 
respect for them, because of my desire for their continued happi- 
ness aud prosperity, that I desire now, through you, to ask con- 
sideration of the facts, that they now exercise a poHtical power 
wholly disproportioned to their numbers; that the State in which 
I reside, with hco Senators, has a population nearly equal to that 
of New England with tioeh-e Senators; that, as a consequence, the 
Senate, as regards economical questions generally, is now in fre- 
quent conflict with the House; that the day is at hand when there 
will be a dozen States, each one of which will outnumber all New 
England ; that abolition of slavery has removed the difSculties 
which so long had stood in the way of union between the Centre 
and the South ; that of all the States there are none that, for that 
reason, should so studiously as your own avoid suspicion of im- 
proper use of power; that to enable the East to maintain its pre- 
sent political position there is needed a most discreet, most careful, 
most magnanimous exercise thereof; and that, for want of that 
care, for want of that discretion, for want of that magnanimity, 
the Union is to-day, in my belief, more endangered than it had beeu 
in the years by which the war had been immediately preceded. 

That you will now believe this I do not at all expect. Neither 
did I expect Mr. Dallas to believe me when, less than ten years 
since, in answer to a question as to when the Capitol would be 
completed, I told him that it would be "just about the time when 
the Union would be dissolved." "Nothing," as I then added, 
"could stand against a system which, like that of the tariff of 1846, 
made Liverpool the centre of exchange among ourselves aud with 
the world at large, and made of our railroads mere conduits to be 
used for carrying to Britain the soil of the country in the form of 
wheat, corn, tobacco, and cotton. It would," as I continued, 
"ruin any country of the world." Of this he did not then believe 
a single word. Nevertheless, two years afterwards, when too late, 
he did believe it. So, as I fear, will it be with your constituents 
and yourself. They will believe nothing of the danger until the 
ruin shall have come, as, without a change of policy, come it must, 
and before the close of the next decade. 

An enlightened foreigner, one who had had abundant oppor- 
tunities for studying our people, said of them, but a few years since, 
that "none so soon forgot yesterda}'." Nothing was ever more 
truly said. Rarely, if ever, do we study the past. We never, in 
any manner, in our public affairs, profit by experience, whether 
our own or that of others. 13e the question before us what it may. 



great or small, it is treated precisely as if none such had, here or 
elsewhere, ever before arisen; and hence it is that our movements 
so much resemble those of a blind giant, daily forced to look for 
advice to the one-eyed dwarfs by whom we are surrounded. Were 
it otherwise — could our people. North and South, East and West, 
but be persuaded to study a very little of their oivn history — could 
it, do you think, be made to pay for Britain to employ so many of 
her people, Irish and English, Christian and Hebrew, in the work 
of teaching them the advantage to be derived from maintaining 
and increasing their dependence upon a country whose movements 
were becoming daily more irregular and uncertain ; . whose power 
for self direction was diminishing with each succeeding year ; one 
that to-day had not, outside of this Union, a friend on earth ; one 
that had already passed its zenith, and for the reason that the 
societary ruin by which she was surrounded was in the direct 
ratio of the reliance of others on her friendship? Seeking evi- 
dence of this, let me beg you to look to Ireland, the land of 
"popular famines;" to Turkey, with which she has for cen- 
turies been in close free trade alliance ; to Portugal, once the 
most valuable of her customers ; to India, in which the millions 
who formerly were occupied in the cotton manufacture, are now 
"festering in compulsory idleness;" to China, brought to a state 
of anarchy by means of wars made for maintaining the illicit opium 
trade; to Japan, likely, according to Earl Grey, soon to be reduced 
to the condition in which China now exists ; to Australia, now 
little more than a great sheep walk, whose occupants, in default 
of any market for their products, are now again converting 
their flocks into tallow ; to New Brunswick and Nova Scotia, 
both abounding in coal and ores, while compelled to import all 
the iron they use; and finally, to Canada, whose population has 
for the past few years been steadily passing to the land of the stars 
and stripes, seeking there the protection denied to them at home. 
Look where you may, you will find prosperity to exist ^'?^ the inverse 
ratio of the connection with Britain. Look even to France and see 
that loss of position before the world has gone hand in hand with 
her adoption of the British system. Seeking evidence of these 
decaying tendencies, you may with advantage turn to the last Ed- 
inburgh Eeview, finding therein a proposition for military alliance 
between the two countries as the only mode of preventing further 
loss of caste. 

Britain has been long engaged in building an inverted pyramid; 
but at no period has her progress in that direction been so rapid 
as within the last twenty years, the free trade period. The import- 
ant class of small landholders so much admired by Adam Smith — 
that class which so long had constituted the right arm of British 
strength — has now almost entirely disappeared, half of the land 
of England being owned by 150 men, and half of that of Scotland 
by a single dozen. So, too, is it in regard to all industrial pur- 
suits, a perpetual series of crises having crushed out the smaller 



and more useful men, and all the processes of mining and manu- 
facture having passed into the hands of the few whose vast for- 
tunes had enabled them to profit by the ruin of the lesser men by 
whom they had been surrounded. In consequence of this it is, that. 
British society daily more and more exhibits the phenomena of 
squalid poverty side by side with enormous wealth ; precisely the 
state of things that, under the free trade and pro-slavery policy, 
had, before the war, obtained throughout the Cotton States. To 
these latter it brought the weakness that has recently been so well 
exhibited. To the former it has brought the decay of influence that 
has, on a recent occasion, led a reflecting British writer to say to 
his countrymen that "the counsels which Lord Stanley is said to 
be pressing both at Berlin and Paris, count for about as much as 
if they came from the cabinet of Sweden or Portugal ;" than which 
nothing could be more true — Britain having no longer a place in 
the European system. To enable her to maintain a place anywhere 
she must break up this Union, and to the consciousness of this has 
been due the fact that, with the exception of the mere laboring 
class, nearly the whole body of the British people has exhibited 
itself before the world as advocate of a system which has human 
slavery for its corner-stone, and as ready to make any sacrifice of 
honor or of conscience, public or private, that might be needed for 
securing its permanent establishment. Thus far she has failed ; 
but, having now before her only the choice between, on the one 
hand, the disruption of our Union, and, on the other, her own de- 
scent from the position she so long has occupied, we may be quite 
assured that no effort will be spared that may seem to tend towards 
accomplishment of the former. 

To prevent this would be an easy task could our people but be 
persuaded to study a very little of the past, with a view to an un- 
derstanding of the present, and to preparation for the future. That 
you at least, my dear sir, may be induced so to do, I propose in 
another letter to present for your consideration a brief view of 
the mode by which preparation had before the war been made 
for accomplishment of the ruin from which we so recently have 
escaped, meantime remaining, with great regard, 

Yours, truly, 

HENRY C. CAREY. 

Hon. Henry Wilson. / 

Philadelphu, Aug. 20, 1867. ^ ^ 



LETTER SECOND. 

Dear Sir : — 

Before prescribing for removal of fever the skilful physician seeks 
to ascertain why it exists, varying his treatment with variation in 
the cause discovered. The quack treats all fevers alike, and kills 
his patients. What is true with regard to physical evil is equally 
so with reference to social disease, it being essential that we un- 
derstand the ultimate cause of error before we write the prescrip- 
tion for its cure. In the case now before us you charge all our 
recent troubles to the existence of slavery, but your Address fur- 
nishes no answer to the previous question, Whrj had it been that 
slavery had so rapidly grown in poiver'} Studying the matter 
more carefully you will, I think, find that, like the fever, slavery 
had been the mere symptom, and that if you would now prevent its 
recurrence, if you would really and permanently establish human 
freedom, you must begin by eradicating the cause, just as you 
would remove trouble of the head by treatment of the stomach. 
In no other way can permanent reconstruction be secured. Of 
that you may rest assured. 

That you, my dear sir, may arrive at a proper understanding 
of the ultimate cause of our recent troubles, look around you la 
Massachusetts and satisfy yourself that it has been precisely as 
pursuits have been more and more diversified, precisely as competi- 
tion for the purchase of labor has increased, that the weak have 
been rising to a level with the strong, that the woman has been 
coming more near to an equality with the man, the man himself 
more and more acquiring the power of self-direction. Look again, 
and see that diversification of employment has always grown 
most rapidly in periods of protection against the working of the 
British monopoly system, and that then it has always been that 
the capitalist has been obliged to seek the laborer. Look then 
further, and see that it has been in periods of British free trade, 
so-called, but really monopoly, that the laborer has lost the power 
of self-direction and has been obliged to seek the capitalist, and 
then determine for yourself which has in the North proved thQ 
road to freedom. 

Turn next south, and see that slavery had grown in power just 
as the land had become more and more monopolized, as the little 
proprietors more and more disappeared from the stage, as the 
laborer everywhere found himself more and more compelled to limit 
himself to the single pursuit of raising raw material for the supply 
of distant markets, the proper work of the barbarian and the slave. 



8 

and of those alone. That done, you will, as I think, better under- 
stand why it has been that freedom had tended upward in all that 
portion of the country that had accepted the idea of protection, 
and downward in those that had resisted it. There is but one 
road to freedom, peace, and harmony, and that is found in such 
diversification of pursuits as leads to enlargement of domestic com- 
merce, and stimulation of the societary circulation. 

British policy looks to arrest of tlie circulation of the world by 
means of compelling all raw material produced to pass through its 
little workshop. It is a monopoly system, and therefore it is that 
poverty, disease, and famine, all of which unite for the production 
of slavery, are chronic diseases in every country wholly subjected 
to British influence. 

Therefore, too, has it been that British agents have been always 
in such close alliance with the slave-holding aristocracy of the 
South ; and that, throughout the late war, British public opinion 
has been so nearly universally on the side of the men who have 
publicly proclaimed that slavery was to be regarded as the proper 
corner-stone of all free institutions. 

British free trade, industrial monopoly, and human slavery, travel 
together, and the man who undertakes the work of reconstruction 
without having first satisfied himself that such is certainly the fact, 
will find that he has been building on shifting sands, and must 
fail to produce an edifice that will be permanent. So believing, 
and seeing in your Address nothing that indicates a proper appre- 
ciation of the fact that it is to a diversification of our pursuits, alone, 
we are to look for permanent establishment of human freedom and 
national independence, for permanent reconstruction of the Union, 
I am led to ask you to accompany me in an examination of the 
real causes of the rebellion that is proposed now to make. Let 
these be ascertained, and you may then safely proceed in the great 
work in which you are so actively engaged, but not before. With- 
out this you will be prescribing for permanent dissolution, and not 
for reconstruction. 

Within the last half century, compelled thereto by the general 
ruin that has in each and every case resulted from permitting 
the advocates of pro-slavery and British monopoly ideas to dictate 
our course of action, we have three times sought to establish 
domestic commerce and thus to achieve a real independence. In 
each of these the country almost at once revived, commerce became 
active, labor came again into demand, and prosperity reigned 
•tliroughout the land. Throughout each and every of them, how- 
ever, British money has been lavishly aj)plied to the work of teach- 
ing the vast advantage to be derived from coming again under the 
British yoke ; from again submitting to be compelled to make all 
our exchanges with the world at large in a single, distant, and 
diminutive market ; and from thus uniting with British traders in 
the work of preventing the growth of human freedom. As a con- 
sequence of these teachings, and of the constant stimulation in that 



direction by the advocates of human slavery as it existed in this 
western world, the tariffs of 1828 and 1S42 were allowed an exist- 
ence of less than five years each, the general result having been, 
that of the last five and forty years by which the war had l)een pre- 
ceded, there had been less than ten in which our ])o]icy had tended 
in the direction of human freedom and national independence. 

Brief as had been the existence of the first of these tariffs its 
close found the country so far advanced in the right direction that 
the foreign debt, public and private, had been entirely discharged. 
Nevertheless, but seven years of the then re-established British 
monopoly system with its perpetually-recurring financial crises; 
its destruction of internal commerce; its annihilation of confidence; 
and its paralyzing effects in destroying the demand for labor; 
sufficed for plunging the country more deeply in debt than it ever 
before had been, and for making us more than ever dependent 
upon the chances and changes of a market tliat, more than any 
other, is governed by men who find their advantage in bringing 
about those sudden upward and downward movements by means 
of which they are themselves enriched, their humble dependents 
throughout the world being meanwhile ruined. The end in view 
is trading despotism, of all despotisms the most degrading to 
the unfortunate beings subjected to it. The name by which it 
is generally known is that of British free-trade — a freedom that 
carries with it slavery in the various forms of war, poverty, 
famine, and pestilence, and for emancipation from which, as has 
so well been proved in Ireland, its unfortunate subjects can find 
but a single road — that one which terminates at the grave. Of 
all, it is the meanest, most selfish, most soul-destroying; yet are 
its advocates among ourselves found among those who most pro- 
fess a belief in human freedom. 

Under the tariff of 1842 we resumed the road towards inde- 
pendence, commencing discharge of the heavy obligations in- 
curred in the seven years of the monopoly system, and so rapid 
was our progress in that direction that but a single decade would 
have been required for the attainment of perfect emancipation. 
That, however, did not suit the admirers of, and believers' in, 
human slavery, either at home or abroad. The system was to be 
broken down, and to that end our farmers were assured that if 
they would but consent to re-establish Liverpool in its old posi- 
tion of centre of the Union, at which the farmer of Illinois should 
make all his exchanges with his neighbor of Tennessee, our grain 
exports would speedily count by hundreds, if not even by thou 
sands, of millions of dollars. The ridiculous absurdity of all such 
calculations now exhibits itself in the fact, that our average export 
to Britain of wheat and flour, for the last ten years, has been but 
the equivalent of little more than 10,000,000 cwts., or 10,000,000 
bushels. It is, however, the business of British agents — that for 
which they are so well paid — to deceive and cheat our people. 
Should you desire new evidence to this effect, look, I pray you, to 



10 

tbe fact, that the British Free-Trade League, which holds its 
meetings in New Tork, and which is supported by contribu- 
tions of British traders, has just now refused the offer of their 
American opponents to institute a free discussion, by means of 
which all might be enabled to see both sides of the question. 
No journal in foreign pay ever, by any chance, permits its sub- 
scribers to see the argument in favor of industrial independence. 
No American journalist would hesitate for a moment to enter into 
any arrangement by means of which all should be enabled to see 
the argument pro and con on this important subject. 

From the date of the re-establishment in 1846 of the British 
monopoly system we went steadily forward destroying the domes- 
tic commerce, increasing our dependence on Liverpool as a place 
of exchange with all the world, and augmenting our foreign debt, 
until all at once the inevitable result was reached — that of disso- 
lution of the Union. That no other could have been arrived at 
will, as 1 think, be clearly obvious to you when you shall have 
studied the facts that will now be given. 

Under the free-trade system, with its constantly increasing de- 
pendence on the most unstable and irregular market of the world, 
proper development of the abounding mineral wealth of the Cen- 
tral States was entirely impossible. As a consequence of this, 
nearly the whole increase of Northern population was forced to 
seek the prairie lands of the Northwest and West, there to employ 
themselves in tearing out the soil and exporting it, in the form of 
wheat or corn, to markets of the East, home or foreign ; and 
thus, as far as in their power lay, increasing competition for the 
sale of food, and of all other raw materials they had to sell, 
while increasing competition for the •purchase of iron, and all the 
commodities they had need to buy — that being the especial object 
of the monopoly system established by Britain, and now given to 
the world as tending to the promotion of freedom of commerce. 
As a further consequence, the Slave States of the Centre, unable 
to develop and mine their numerous and abounding ores, were 
compelled to send their people south; and thus did we, from day 
to day, increase the weight and power of the extreme North and 
the extreme South, while depopulating and weakening the Centre. 

That you may fully understand the effects of this, and how it 
had been that secession had gradually become not only possible 
but inevitable, I pray you now to take up a railroad map of the 
Union, and mark the fact that all our great roads are merely spohes 
of a wheel ivhose huh is found in Liverpool. Those of them which 
have most tended to acquire strength and weight are those which 
have found their terminations north of Pennsylvania, and south 
of Virginia. With each and every stage of movement in that 
direction it became more and more impracticable that the two 
extremes could hold together, until at length they parted com- 
pany in 1861. That such was the tendency of the British mo- 
nopoly system, and that such must certainly be the result, had 



11 

long been clearly obvioa?; to me, when, less than ten years since, 
I told Mr. Dallas, then in London, that dissolution of the Union 
would come about the time when the Capitol should be completed. 
In this I erred, the building being not even yet quite finished. 
Whether or not, when it shall be so, it will be the Capitol of all 
the existing States, is very doubtful. Without a decided change 
of policy it certainly will not, the centrifugal force of the system 
now advocated by Massachusetts being too great to defy resist- 
ance. 

What is it, my dear sir, that now so closely binds together the 
New England States ? Is it not their networh of roads. Could 
they now by any possibility be torn asunder ? Certainly not. 
Could there be any difficulty in accomplishing this were there but 
two great parallel roads leading through Boston and Portland to 
Liverpool ? Not in the least. Sectionalism would then be as rife 
in New England as it has been throughout the extreme south and 
extreme north. Mr. Lincoln saw clearly that the Mississippi was 
the cross-tie that had held the Union together, and therefore did 
he urge the making of another through. the hills, recommending a 
road that should pass through Kentucky and East Tennessee. 
Congress refused the little aid that had been asked for, yet did it 
never hesitate at granting enormous quantities of land in aid of 
roads across the continent. So long as our legislation on all 
economic subjects shall continue to be sectional in its tendencies it 
is wholly vain to hope for permanent reconstruction. Had Mr. 
Lincoln's advice been taken, Kentucky would now, in all proba- 
bility, be a republican State. 

Having thus shown the sectional and pro-slavery tendencies of 
the British monopoly system, I propose now to ask your atten- 
tion to the manner in which construction has been elsewhere ac- 
complished, believing that when this shall have been properly un- 
derstood there will be less difficulty about measures of reconstruction. 
I remain yours, &c., 

HENRY C. CAREY. 

Hon. Henry Wilson. 

Philadelphia, Aug., 1867. 



12 



LETTER THIRD. 

Dear Sir : 

Ten years since I expressed the belief that Germany, whose 
" national sin for the last two centuries," according to Chevalier 
Bunsen, " had been poverty, the condition of all classes, with few 
exceptions" — Germany, which thirty years before had been held 
to be immensely overpopulated — then already stood " first in 
Europe in point of intellectual development," and was " advancing 
in the physical and moral condition of her people with a rapidity 
exceeding that of any other portion of the Eastern hemisphere." 

Since then, an empire has been constructed embracing a ]iopula- 
tion little short of 40,000,000, among whom education is universal ; 
with a system of communications not excelled by that of any other 
country, with the exception of those provided for the very dense 
populations and limited territories of England and of Belgium; 
with an internal commerce as perfectly organized as any in the 
world, and growing from day to day with extraordinary rapidity ; 
with a markef on the land for nearly all its products, and, as a 
necessary consequence, with an agricultural population that grows 
daily in both intelligence and power ; with a mercantile marine 
that now numbers more than 10,000 vessels ; with a public treasury 
so well provided that not only has the late war left no debt behiud, 
but that it has been at once enabled to make large additions to 
the provision for public education ;* and with private treasuries 
so well supplied as to enable her people not only with their own 
means to build their own furnaces and factories and construct their 
own roads, but also to furnish hundreds of millions to the improvi- 
dent people of America, to be by them applied to the making of 
roads in a country the abundance of whose natural resources should 
long since have placed it in the position of money lender, rather 
than that now occupied of general money borrower. 

The course of things on the two sides of the Atlantic has thus, 
as we see, been entirely different. On the one side there has been 

* " Shocked as the Chamber was at the extent of the Budget, yet the 
Liberal party received with applause the auuouneeuient that a half million 
thalers was expended in order tp increase the salaries of the teachers in 
the public schools. 200,000 thalers were devoted especially to the teachers 
of primary schools, a small sum, it will be said, for the teachers of a uatiou 
of twenty millions ; but the sum, in relation to the end proposed, is not so 
email as it at lirst sight seems. The primary schools are exclusively con- 
nected with the communities, and must be tolerably well maintained by 
the latter. And this sum is appropriated only to those communities which 
are too poor to pay the teachers sufficiently." — Tribune CorresjioitJ.nce. 



13 

a quiet and peaceful movement that has ended in constnictio7i. 
On the other a constant series of f^uds, that has resulted in a need 
for reconstruction. Why it is that results so widely different have 
been obtained I propose now to show you. 

Five and thirty years since, Germany and the American Union 
exhibited states of things directly antagonistic, the one to the 
other. The first was divided and disturbed, its internal commerce 
in every way embarrassed, its people and its various governments 
very poor, and with little hope in the future except that which 
resulted from the fact that negotiations were then on foot for the 
formation of a Customs Union, which shortly after was accom- 
plished. In the other everything was different, the internal com- 
merce having been more active than had ever before been known, 
the public treasury filled to overfiowing, the national debt on the 
eve of extinction, and capital so much abounding as to make de- 
mand, for the opening of mines, the building of houses and mills, 
and the construction of roads, for all the labor power of a people 
that then numbered thirteen millions. 

The cause of these remarkable differences was to be found in 
the facts, that, up to that time, Germany had wholly failed to 
adopt such measures of co-ordination as were needed for establish- 
ing rapidity of circulation among the 30,000,000, of which her 
society was then composed ; whereas Congress had, four years 
before, and for the first time, adopted measures having for their 
object development of all the powers, physical, mental, or moral, 
of its population, all the wealth of its soil, and all the wonder- 
ful mineral deposits by which that soil was known to be under- 
laid. The one had failed to bring together the producer and 
consumer of food and wool, and had remained dependent upon 
traders in distant markets. The other had decided that such 
dependence should, at no distant time, come to an end ; that pro- 
ducers and consumers should be brought together ; and there had 
thence already resulted an activity of circulation and an improve- 
ment in physical and moral condition, the like of which had never 
before been known to be accomplished in so brief a period. 

Three years later (1835), the two countries are once again found 
totally opposed, Germany having adopted the American system 
and thus provided for freedom of internal commerce, America 
simultaneously adopting that which to Germany had proved so 
utterly disastrous, and which had been then rejected. Thenceforth 
the one moved steadily forward in the direction of creating a great 
domestic commerce, doing this by means of a railroad system which 
should so-bind together her whole people as to forbid the idea of 
future separation. The result already exhibits itself in the quiet 
creation of a powerful empire. The other meanwhile has con- 
structed great roads by means of which it has been enabled to 
export its soil, in the forms of tobacco, corn, and cotton, to distant 
markets, and thus to destroy the power to maintain internal com- 
merce — the result obtained exhibiting itself in a great rebellion 



14 

that has cost the country, North and South, half a million of lives, 
the crippling of hundreds of thousands of men, and an expenditure 
of more thousands of millions than, properly applied, would have 
doubled the incomes of its whole people, while making such de- 
mand for human force, mental, moral, and physical, as would, in a 
brief period, have secured the establishment of universal freedom, 
with beneflt to all, white and black, landowner and laborer. Such 
have been the widely different results of two systems of public 
policy, the one of which looks to introducing into society that 
proper, orderly arrangement which is found in every well-conducted 
private establishment, and by means of which each and every per- 
son employed is enabled to find the place for which nature had 
intended him ; the other, meanwhile, in accordance with the doc- 
trine of laisser faire, requiring that government should abdicate 
the performance of its proper duties, wholly overlooking the fact 
that the communities by which such teachings are carried into prac- 
tical effect — those whose dependence on Britain is a growing one — 
now exhibit themselves before the world in a state of utter ruin. 

Turn now, if you please, to a railrooid map of Germany, and see 
how wide is the difference between it and a similar map of the 
Union. Instead of a few great railroad lines leading out of the 
country, and having for their objects the compulsion of the people 
of close adjoining States to go abroad to make exchanges — 
Tennessee and Alabama going to Manchester and Liverpool to 
exchange with their neighbors of Indiana and Illinois — you find 
a perfect network, by means of which every town throughout 
the whole extent of the new empire is enabled peacefully and 
cheaply to exchange with each and every other. Look again to 
the journals of the day, and see that it has been just now deter- 
mined that every town of 1500 inhabitants shall at once be put 
into telegraphic communication with each and every other. Turn 
then your eyes homeward, and see that while Congress has been 
willing to grant aid to telegraphic communication outside of the 
Union, it has never, so far as I can recollect, been willing to do 
anything inside of it. That domestic commerce by means of 
which the most powerful empire of Europe has been constructed, 
and in little more than a quarter of a century, is here considered 
wholly unworthy of Congressional notice. 

The difference between the two countries consists in this, that 
the one has been making a piece of cloth, warp and woof, all the 
parts of which become more firmly knitted together from day to 
day ; the other, meanwhile, having made nothing but warp, the 
filling having been forgotten. The strength of the one has been 
recently strikingly manifested in the determination of Southern 
Germany, in defiance of French interference, to adhere anew to 
the Zollverein.* The weakness of the other now manifests itself 

* "The leaders of the ' Sonth German national party' in Bavaria, TVur- 
temburg, Baden, and Hesse-Darmstadt, have decided to hold a meeting at 



15 

in the necessity for interference, on the part of Massachusetts, with 
the internal affairs of Texas and Louisiana. With our eyes always 
directed to Liverpool our whole policy is made sectional, and not 
national, and until it shall be changed it is as certain as that light 
follows the rising of the sun, that there can be no permanent recon- 
struction. 

The great backbone of the Union is found in the ridge of moun- 
tains which commences in Alabama, but little distant from the 
Gulf of Mexico, and extends northward, wholly separating the 
people who inhabit the low lands of the Atlantic slope from those 
who occupy such lands in the Mississippi valley, and its constitut- 
ing a great free-soil wedge with its attendant free atmosphere, 
created by nature herself in the very heart of slavery, and requir- 
ing but a slight increase of size and strength to enable its inha- 
bitants to control the southern policy, and thus to briug the 
entire South into perfect harmony with the North and West, and 
with the world at large. That you may fully satisfy yourself on 
this head, I ask you to take the map and pass your eye down the 
Alleghany ridge, flanked as it is by the Cumberland range on the 
west, and by that of the Blue Mountains on the east, giving in the 
very heart of the South itself a country larger than all Great Bri- 
tain, in which the finest of climates is found in connection with 
land abounding in coal, salt, limestone, iron ore, gold, and almost 
every other material required for the development of a varied in- 
dustry and for securing the highest degree of agricultural wealth ; 
and then to reflect that it is a region which must necessarily be 
occupied by men who with their own hands till their own land, and 
one in which slavery could never by any possibility have more than 
a slight and transitory existence. That done, I ask you to deter- 
mine whether or not I am right in the assertion that the South is 
clearly divided into three separate portions, two of which have 
desired to move in the direction of perpetual human slavery, while 
the third, inserted between them, has been, and is, by the force of 
circumstances, necessarily impelled towards freedom. 

Admitting now that the policy of '42 had been maintained ; that 
rapid circulation had made such demand for labor as to cause the 
annual importation of miners and laborers to count by hundreds 
of thousands, if not almost by millions ; that all the wonderful min- 

Stuttgart in the beginning of August, with the object of forming a league, 
in conjunction with the Prussian liberals, for achieving the unification of 
Germany. This decision is supposed, on good authority, to have been 
precipitated by overtures lately made by France at Carls ruhe, Munich, 
and Darmstadt, with the object of preventing the acceptance by the South 
German States of the Prussian proposals for a restoration of the ZoUve- 
rein. These overtures, it is said, were made in a very dictatorial tone. 
The conduct of the French diplomatic agents in this matter has greatly 
provoked the South German Liberals, and has produced so strong a feeling 
against France in the South German States that even the Ultramontanes 
no longer venture to continue their advocacy of a French alliance against 
Prussia." 



16 

eral resources of the country above described had been placed in 
course of development; that roads had been made by means of 
which Cincinnati and Savannah, St. Louis and Charleston, Boston 
and ]\[obile, had been enabled freely to exchange together ; that 
the country south had been gradually creating a network of 
roads, by means of which coal and iron miners, farmers and wea- 
vers, had been enabled to exchange their products ; admitting, I 
say, all these things, would not the wealth and strength of the 
people of the hills have, long since, so far outweighed those of the 
men of the fiats, as to enable the former to control and direct the. 
movements of the States? Would not that domestic commerce 
have given us freedom for the negro, harmony and peace among 
the people, and love for the Union among the States? Would 
it, under such circumstances, have been possible to drive the 
southern people into secession ? That it would not, you can 
scarcely, as I think, fail to admit. Whensoever we shall have a 
fixed policy, tending gradually towards giving to our whole people 
such a network of roads as now knits together the New England 
States ; whensoever there shall be real freedom of trade between 
Georgia and Illinois, Carolina and Iowa; whensoever the people 
of the interior generally shall be enabled to prosper under a sys- 
tem which stimulates domestic competition for the purchase of 
all they have to sell, and for the sale of all they need to consume ; 
then, but not till then, will the freedom of the so recently emanci- 
pated slave become something more than a mere form of words ; 
and then, but not till then, will there be good reason, my dear 
sir, for believing in the realization of your agreeable antici- 
pations. 

Slavery did not make the rebellion, British free trade gave us 
sectionalism, and jiromoted the growth of slavery, and thus led to 
rebellion. Had Mr. Clay been elected in 1S44, all the horrors of 
the past few years would have been avoided. Why was he not ? 
Because free-trade stump orators of New York and Massachu- 
setts, professing to be opposed to slavery, could not believe him 
radical enough to suit their purposes. They, therefore, gave us 
Messrs. Polk and Dallas, and by so doing precipitated the rebel- 
lion, for the horrors and the waste of which. North and South, 
they are largely responsible before both God and man. Judg- 
ing, however, from recent letters and speeches, they are now will- 
ing. to take the responsiliility of the next secession movement, giv- 
ing us at one moment the extrenicst anti-slavery doctrines, while 
at the next advocating that British free trade policy w^hich had 
always commanded the approbation of southern slaveholders, and 
which has reduced, or is reducing, to a condition closely akin to 
slavery, the people of every community that has been, or is, sub- 
jected to it. Unable to see that any system based on the idea of 
cheapening the raw materials of manufactures, the rude products 
of agricultural and mining labor, tends necessarily to slavery, they 



IT 

make of themselves the pro-slavery men, pew excellence, of the 
world. 

To what extent the policy of your State has, since that time, been 
in accordance with the teachings of such men, I propose in another 
letter to examine, meanwhile, remainino; 

Yours faithfully, ' 

IIEXRY C. CAREY. 
Hon. H. Wilson. 

Philadelphia, Aug. 26, 18G7. 



LETTER FOURTH. 

Dear Sir: — 

Forty years since, at the date of the agitation for the passage 
of that protective tariff of 1828, by means of which the country 
became first emancipated from the control of foreign money-lenders, 
the people of Massachusetts, as represented in Congress, were full 
believers in the advantages of the British free-trade system. 
Fourteen years having elapsed, during one-half of which they had, 
under protection, enjoyed the advantages derived from a peaceful 
and most profitable extension of domestic commerce; the other 
half having, on the contrary, furnished a series of free-trade and 
pro-slavery crises, ending in almost universal bankruptcy, and in 
an exhaustion of the national credit so complete that, after having, 
in 1835, finally extinguished the public debt, it had just then been 
found impossible to borrow abroad even a single dollar ; Messrs. 
Choate and Sprague, representing Massachusetts in the Senate, 
are found gladly co-operating with Archer of Virginia, and other 
enlightened Southern Whigs, in the passage of the act of 1842, 
under which' the consumption of iron and of cottons was, in the 
short space of less than half-a-dozen years, almost trebled; the 
country, meanwhile, resuming payment of its foreign debt, and 
re-acquiring the credit which it had required but a similar period 
of British free-trade so entirely to annihilate. 

The protection granted by the tariff of '42, full and complete as 
it was, enabled Massachusetts — and for the first time — to compete 
in foreign markets for the sale of cottons. It enabled, too, the 
South to engage in their manufacture; and so rapid had, in 1848, 
been its progress, that Mr. Rhett, of the Charleston Mercury, was 
thereby led to predict, in a letter to Mr. Abbott Lawrence, that 
before the lapse of airother decade, it would have ceased to export 
raw cotton. The prediction was one not likely to be so early 
realized, but even its half realization would have spared us all the 
cost in life, limb, and property, of the late rebellion, while it 
would so far have advanced the slave towards freedom as to have 
2 



18 

relieved the existing Congress from all the necessity for those mea- 
sures of reconstruction of which you speak, and in which you have 
been, and are, so actively engaged. 

The repeal of the act of 1846 was followed by a political revo- 
lution which placed General Taylor in the Presidential chair, and 
gave, or seemed to give, to the friends of American labor, and 
American interests generally, power for re-establishing protection. 
Forthwith a convention was held at Newport for the purpose of de- 
ciding what it was that needed to be asked for. The result of its 
deliberations was given to me a fortnight later by the then recog- 
nized head of the cotton interest of your State, in the few brief 
words: "We do not desire any protection that will stimulate 
domestic competition." To put this into other words, it was to 
say :— 

"We do not wish that the South or West should engage in 
manufactures, for that would make competition for the purchase 
of cotton, and raise the price of the raw material." 

" We do not desire that the South or West should become 
manufacturers, for that would produce competition for the sale of 
cloth, and reduce our profits." 

"The tariff of 1846 having already closed the few mills of the 
Centre and the South, we do not desire any tariif that could 
have the effect of reopening them, or of causing new ones to be 
erected." 

" That tariff having broken down our competitors, has given 
us a monopoly, and we desire to keep it. Nevertheless, we desire 
to have the duties increased some five or ten per cent., for that 
would benefit us, and would not suffice for producing domestic 
competition either for purchase of the raw material, or for the sale 
of finished goods." 

It was a very narrow view of the question, wholly rejecting, as 
it did, the idea of any harmony between the interests of the pro- 
ducers and consumers of cotton. It was the right British idea, 
then first, as I think, naturalized in this country, and from that 
time forward, as I propose to show, made the rule of action of your 
representatives in both houses of Congress. It was the pro-slavery 
idea, common sense teaching that " raw materials" represent agri- 
cultural and mining labor, and, that whatever tends to increase 
competition for their sale, and thus to reduce their prices, tends 
directly to the subjugation of the laborer, black or white, to the 
will of those by whom his labor is directed. AVherever raw mate- 
rials are low in price, man, be his color what it may, and whether 
found in Ireland or India, in Jamaica or Alabama, in Canada or 
Illinois, is little better than a slave, the only diti'orence being in 
the form in which the master's whip presents itself for examina- 
tion. The well-fed negroes of the South were, ten years since, 
less enslaved than were those Irish people so accurately described 
by Thackeray as "starving by millions." The Russian serf, pay- 



19 
I 

ing obroh to his master, and comfortably supporting his wife and 
children on the proceeds of his labor, was far more master of his 
actions and himself than this day are the small remnant of those 
Pennsylvania miners that, in April, 1861, threw aside their tools 
and rushed to the nation's rescue, finding themselves, as they do, 
wholly without the employment by means of which they might be ' 
enabled to obtain better supplies of food and clothing. Com- 
petition for the purchase of labor makes men and women free. 
The ballot-box is useful as a means of perpetuating freedom. In 
your Address I find much in reference to this latter, but in regard 
to the former, and infinitely the most important, you are, as is 
much to be regretted, wholly silent. 

The election of Mr. Cobb, in 1849, as Speaker of the House, 
threw the committees into the hands of the Democrats, and your 
manufacturers, as a consequence, wholly failed to obtain that small 
additional protection for which they so steadily had asked ; just 
as much as, but no more than, would give security to themselves, 
while not in any manner "stimulating domestic competition" for 
purchase of cotton, or for the sale of cloth. 

At the next step we find a coalition between British iron- 
masters and a self-constituted committee of three, having for its 
active head an ex-raember of Congress from Massachusetts, 
since then presiding officer in one of the Republican conventions. 
This committee was, for a commission, to procure repeal of all 
duties on railroad iron, and return of much of those already paid. 
The movement failed ; but for three years the sword of Damocles 
was held over the heads of all those engaged in the production of 
coal and iron, and at a cost to the mining interests of the country 
at large greater than would now suffice for buying and paying 
for all the cotton and woollen mills of your State, and all the 
towns in which those mills are placed. 

Two years later the East proposed to the West, that, as com- 
pensation for granting it free wool, free raw material, and pro- 
slavery economic policy generally, it would itself generously con- 
sent to sacrifice the interests of its late co-laborers of the mining 
centre — of that section to which alone it had been indebted for 
the triumph of Whig principles in 1848. The proposition, in 
the form of an amendment to the appropriation bill, was strongly 
advocated by a distinguished Massachusetts member, shortly 
afterwards raised to the speakership, and it finally passed the 
House. It was defeated in the Senate, having there, on the last 
day of the session, been talked to death; this, too, in defiance of 
all the efforts of Massachusetts manufacturers, and of the readi- 
ness by them manifested to buy, and pay for, the silence of those 
engaged in the patriotic work.* 

The first of these periods had been given to the closing of 

* Should conclusive evidence on this subject be desired, it can at any 
hour be supplied. 



20 

existing rolling-mills, and preventing the building of others. In 
the second, it was claimed that because the mills were idle that, 
for that reason, the work of destruction should be further carried 
forward. 

Simultaneously with these operations came the Canada recipro- 
city scheme, having for its object the cheapening of all the raw 
materials of manufacture that could be obtained from the country 
beyond the Bay of Fundy and the St. Lawrence, barley, wool, 
wheat, and coal, included. Wholly misunderstood, it passed the 
House, and was on the eve of becoming a law by means of sena- 
torial action when I myself, for the first time, opened the eyes of 
Mr. Clay and other leading senators to the injurious, and even 
destructive, tendencies of the measure. From that hour the case 
became so hopeless that, as I think, the bill never afterwards 
came up for consideration. The election of Mr. Pierce, and con- 
sequent return of the pro-slavery party to power, brought about 
a change, however; it having then become to the South most 
clearly obvious that for preventing annexation of the British Pos- 
sessions there was but a single remedy — that of granting to the 
Provinces all the advantages of being in the Union, while requir- 
ing of their people the performance of none of the duties, the bear- 
ing of none of the burdens, of American citizens. Such was the 
true intent jind meaning of the treaty that then was negotiated, 
and that was carried through the Senate by aid of the combined 
pro-slavery and trading States, Massachusetts and New York 
steadily uniting with Carolina for preventing any change in the 
period for which it was to endure, and unanimously recording 
their votes against limiting it to one, two, three, and so on to nine 
years. To force through the House a bill providing for carrying it 
into effect was now the difficulty. That the work was done all 
know, but of the character of the means resorted to for having it 
done, few know who have not had the advantage I have had of 
hearing it fully described by one of the most honored and honora- 
ble members of the House. As in the case of the amendment to 
the appropriation bill above referred to, it seemed to be held that 
" the end" — the cheapening of raw materials at whatsoever cost to 
the farmers, miners, and laborers of the Union — "sanctified the 
means;" and "sanctified" them even in the eyes of men who long 
had found their chief employment in lecturing their fellow-citizens 
on the unchristian character of American slavery, and on the 
necessity for giving freedom to the Southern producers of those 
raw materials in the cheapening of which they found themselves so 
steadily engaged. 

That this had been from first to last a Boston, measure, is, of 
course, well known to you, as you must have seen the circulars 
asking subscriptions for moneys to be ])aid to the men who had 
succeeded in placing Canadians in a position far better than that 
occupied by our own citizens. 

Close upon this followed the nomination of General Fremont, 



21 

another British free-trade measure forced upon the States of the 
Centre by extremists of the North and East. In the course of the 
campaign the agents of British maimers of cloth and iron were, on 
one occasion, greatly gratified by a speech made in front of the 
New York Exchange by a gentleman of Massachusetts, who, in 
his character of Speaker of the House, had, but a few months pre- 
viously, appointed committees entirely satisfactory to that portion 
of the body which had had full belief in American free-trade, and 
in the idea that every step in the direction of diversified industry 
tended towards emancipation for the laborer, black and white, 
foreign and domestic. 

Coming now to 1851, we find the "Ways and Means Committee, 
by its chairman, Mr. Campbell, of Ohio, reporting a bill for reduc- 
tion of the revenue, somewhat satisfactory to the i^eople of the 
Centre and the West. Wholly changed by a senatorial pro- 
slavery committee, with Mr. Hunter, of Virginia, at its head, it 
was then advocated by yourself, my dear sir, in a speech in which 
occurs the following passage, to wit: — 

" The people of New England, Mr. President, and especially 
of Massachusetts, are very extensively engaged in the manufacture 
of articles in which wool, hemp, flax, lead, tin, brass, and iron are 
largely consumed. It is for their interest that the duties on these 
articles should be merely nominal, or that they should be duty 
free." 

The opposition to this pro-slavery and cheap raw material sub- 
stitute of the Virginia senator was very vigorous, Mr. Seward 
taking therein a very decided part. So doubtful, at length, be- 
came its adoption, that its friends found it necessary to telegraph 
your colleague, Mr. Sumner, advising him that without his vote 
the friends of freedom for the American mining and agricultural 
laborer, and of independence for the American Union, would 
probably succeed in accomplishing its rejection. He came, then 
presenting himself for the first time in the session, still suffering 
under injuries caused by the attack of a Carolinian opponent of 
the doctrine of diversified interests; and he then and there united 
with Virginia, Carolina, and Mississippi in a vote, the true intent 
and meaning of which was, that the farmers, miners, and laborers 
of America, black and white, should, in all the future, be mere 
" hewers of wood and drawers of water" for Southern slaveholders 
and British and Eastern capitalists. 

On more than one occasion I had said to your Colleague that 
while he had spoken much of freedom, his senatorial votes on 
industrial questions had thus far always been given on the pro- 
slavery side. Meeting him in Paris shortly after the one last 
above recorded, I could not refrain from congratulating him on 
having so far recovered from the effects of Carolinian brutality as 
to have been enabled to unite with Carolinian senators in a vote 
for perpetuation of slavery throughout the South. In the true 
Christian spirit he had returned good for evil. 



22 

The passage of that act brought about a crisis, whose effect was 
that of almost total stoppage of cotton and woollen mills through- 
out the country north and south. For the moment Massachusetts 
suffered some little inconvenience, but she soon after resumed 
operations, and with great advantage to herself, her rivals in the 
Central, Southern, and Western States having been irretrievably 
ruined. The danger of " domestic competition" had disappeared, 
and the manufacturing monopoly had become assured. 

The years that followed exhibited an almost total prostration 
of the various industries of the country, yet was it determined by 
the leaders of the Republican party, North and East, that the 
platform to be adopted at Chicago should be a mere repetition of 
that of 1856, all "new issues" to be entirely ignored. On the 
Committee of Resolutions there was, however, one member who 
was determined that the question of protection should be squarely 
met, and he therefore notified his fellow-members that if they did 
not then and there adopt a resolution to that effect they should 
be compelled to fight it on the following day on the floor of the 
convention. In that he, representing New Jersey, was sustained 
by the member from Delaware, and the debate terminated by the 
adoption of a resolution in the following words, the reading of 
which, on the succeeding day, was followed by a storm of ap- 
plause from the assembled thousands, the like of which has had no 
parallel on this Western Continent: — 

" That, while providing revenue for the support of the General 
Government by duties upon imports, sound policy requires such 
an adjustment of those imposts as to encourage the development of 
the industrial interests of the whole country ; and we commend that 
policy of national exchanges which secures to the workingmen 
liberal wages, to agriculture remunerating prices, to mechanics 
and manufacturers an adequate reward for their skill, labor, and 
enterprise, and to the nation commercial prosperity and inde- 
pendence." 

Such is the history of the decade. It is the history of a con- 
stant war by Massachusetts upon the greatest of all the national 
interests — a war for sixpences, carried on at an annual cost to the 
mining and farming regions of the country five times greater than 
the receipts of California gold — a war more than half the cost of 
which was paid by Pennsylvania. To the Union at large its cost 
consists in this, that had Massachusetts fully, fairly, and honestly 
exerted her influence in the opposite direction, the iron manufacture 
of the Border States would probably have made such progress as 
to have prevented their secession, and thus prevented all the injury, 
as regards both property and life, they have been made to suffer. 

Of what has since occurred I shall speak in another letter, 
meanwhile remaining, 

Yours, very truly, 

HENRY C. CAREY. 

IIo.v. Henry Wilson. 



23 



LETTER FIFTH. 

Dear Sir: — 

By the adoption, as part of its platform, of the resolution given 
in my hist, the Republican party pledged itself to a policy the 
reverse of that advocated by yourself in 1857; one which looked 
to "stimulation of competition" for the purchase of raw mate- 
rials, labor included; one which would "stimulate domestic 
competition" for the sale of finished commodities ; one based 
on the idea, apparently unliiiown to our Massachusetts friends, 
that protection _to the miner, by giving him means of purchase, is, 
in effect, protection to the maker of cloth ; and that protection to 
consumers of his products is, in effect, protection to the farmer, 
there being a perfect harmony of interest among all the members 
of the social body. 

Less than a year later, Congress redeemed the pledge then 
given, enacting into law the determination of the many thousands 
preseut at the Chicago Convention, a protective tariff having re- 
ceived the assent of Mr. Buchanan on the day before his quitting 
office. By it full protection was secured to the cotton manufac- 
turer, and this was then most gladly accepted by the men of 
Massachusetts, the Cotton States having left the Union, and 
the danger of "stimulating domestic competition" having alto- 
gether ceased. 

For means to carry on tlie war an internal revenue, however, 
came soon after to be required, and, as usual, the mining interest 
was made to suffer; taxes being piled upon iron at its every stage 
from tlie pig to the engine, while duties on the most important 
of all its products, railroad bars, were subsequently so diminished 
that the difference between contributions by the domestic and 
foreign article fell to little more than that which resulted from 
the fact that gold was required for the latter, while greenbacks 
sufficed for the former. 

So long as the war endured, and the premium on gold con- 
tinued large, this latter furnished all the protection which seemed 
to be required. With the peace, however, this so far died away 
as to produce a necessity for such change in the tariff as would 
tend to counteract the nullification of protection caused by de- 
mand, for public use, for contributions on almost every article 
at every stage of manufacture. To this end the Secretary of the 
Treasury appointed a Commission, upon whose report was based 
a tariff bill which finally passed the House in the second week of 
July, 1866, and was on the following day received in the Senate. 
A senator from Liwa forthwith moved that its consideration be 
postponed until the following December; and in the debate oa 



24 

this motion yon yonrself, as representative of the manufacturing 
interests of your State, spoke as follows : — 

" I shall vote, Mr. President, to commit this bill to tlie Committee on 
Finance, -with instructions to report early in December. I shall so vote 
becanse I believe the permanent interests of the whole country demand 
that the adjustment of the tarilf should be made after the most thorough 
examination, research, and care. Congress cannot take too much time, 
nor devote too much attention, to the proper adjustment of a measure 
that so deeply concerns the revenues of the Government and the varied 
productive interests of the country. * * * 

" What I objected to the other day, and what I object to now, is, that 
New England should be sincjled out and charged with the sin of the 
paternity of this measure. While the representatives of Massachusetts 
and of New England have voted on general principles for this bill, they 
have so voted with a great deal of hesitation, doubt, and reluctance. 
They saw what was clear to the comprehension of gentlemen of ordinary 
intelligence, that this measure imposed increased duties upon raw mate- 
rial, increased largely the cost of production, and subjected the manufac- 
turing and mechanical interests of their section to the censure and hos- 
tility of those who spare no occasion to manifest their hostility to that 
section of our country." 

Here, as ever, "cheap raw material" is, as you see, the one 
object to be accomplished. Pending the existence of the recipro- 
city treaty Nova Scotia coal had come in free of duty, and Boston 
capitalists had, as it is understood, become largely interested in 
the properties by which it had been supplied. The treaty having 
been abrogated, the special protection they had so long enjoyed 
was now to cease, and the fact that this new tariff bill did not 
provide for continued import of coal duty free, constituted the 
main objection to it. Here, as everywhere, the mining interests 
were made the object of attack ; "cheap raw materials," whether 
" lead or tin, brass or iron," being, as yon had told the Senate in 
1857, essential to your constituents. Who, however, would, in 
this case of coal, have paid the duty? The manufacturers? 
Not one cent of it. The man who vutst go to market viust pay 
the cost of getting there, as is so well known to the farmer of Iowa 
who sells for a few cents a bushel of corn that in Massachusetts 
would command almost a dollar. The price of coal is fixed by 
the domestic supply, and to that the importer must conform, 
whatever may be the cost of transportation, or charges of the 
revenue. The Boston owners of coal mines would have been re- 
quired to pay the duty fixed by the bill before the Senate, yet was 
no effort spared for inducing the people of Massacliusetts, and of 
New England generally, to believe that it was a tax to be paid 
by tliem. 

In the division that ensued we find extremists of the North and 
South combined for destruction of ttie common enemy, the miner 
and the laborer — Massachusetts and 'Kentucky voting together 
lor postponing a measure having for its object the " stimulation 
of domestic competition" for purchase of the rude products of 
mining and agricultural labor ; and New York and Massachusetts 



25 

P'ivinp^ all the votes required for securing postponement of tin's 
important bill to another session. 

At the next session a bill, nearly similar, passed the Senate; 
and now we find in the House a near approach to the senatorial 
action of the previous year. The majority of the latter was 
decidedly favorable to protection, and ti)e state of the country 
demanded that it should be given. By no direct action could the 
bill be defeated ; but here, as everywhere, there were indirect modes 
of accomplishing that which directly could not be done. Its 
management fell into the hands of a representative of Boston capi- 
talists, and the result exhibits itself in the prostration of tiie 
industrial interests of the country; and in the fact, that not only 
do we export all the gold received from California, but that vv^e 
are running in debt J:o Europe to an annual amount little less 
than $200,000,000. In this way it is that we are carrying into 
practical effect " the democratic idea of the Declaration of Inde- 
pendence," making our people from day to day more dependent 
on the capitalists of Massachusetts and of Europe. 

It may be asked, however, if the Boston capitalist engaged in 
the cotton manufacture does not suifer equally with those else- 
where engaged in other industrial departments ? He does not. 
Having secured an almost entire monopoly, all he desires is that 
nothing shall be done that will "stimulate domestic competition ;" 
and to that end, as I understand. New England men have shown 
themselves inflexibly opposed to the granting of any more protec- 
tion than that which they themselves required, or little more 
than that now allowed them. With them capital abounds, inte- 
rest is low, and machinery exists in great perfection. Just now, 
they s'ufiTer in some small degree; but they iind their compensa- 
tion in the fact that, as before in 1848, and again in 185t, their 
competitors in the purchase of cotton and sale of cloth, are being 
ruined beyond redemption. In this State nearly all the mills 
have been already stopped, and the effect of this well exhibits itself 
in the fact that Eastern journalists now tell us, that "factory cloths 
are easy, with an upward tendency in prices, the stocks in first 
hand in all New England not exceeding 150,000 pieces." The 
more frequent the crises, the more dangerous the trade ; and the 
more the free-trade cry can be raised, as is now being done 
throughout New England, the less is the danger of " domestic 
competition" for the purchase of cotton and for the sale of cotton 
cloth ; and therefore is it that Eastern cotton manufacturers have 
been enabled to build up the immense fortunes that we find re- 
corded. The system here pursued by them closely resembles that 
of the great British iron-masters, as below described; the latter 
being as much intent upon having a monopoly of the supply of 
iron to the world as are the capitalists of Boston upon monopoliz- 
ing that of cottons for the Union. 

" The laboring classes generally, in the manufacturing districts of this 
country, aud especia'.ly in the irou and coal districts, are very little aware 



26 

of the extent to which they are often indebted for their being employed 
at all to the immense losses which their employers voluntarily incur in 
bad times, in order to destroy foreign competition, and to gain and keep pos- 
session of foreign markets. Authentic instances are well known of em- 
ployers having in such times carried on their works at a loss amounting 
In the aggregate to three or four hundred thousand pounds in the course 
of three or four years. If the efforts of those who encourage the combina- 
tions to restrict the amount of labor and to produce strikes were to be 
successful for any length of time, the great accumulations of capital could 
no longer be made ichich enable afeio of the most wealthy capitalists to over- 
ichelm all foreign competition in times of great depression, and thus to clear 
the way for the whole trade to st^ in when prices revive, and to carry on 
a great business before foreign capital can again accumulate to such an 
extent as to be able to establish a competition in prices with any chance 
of success. The large capitals of this country are the great instruments of 
■warfare against the competing capitals of foreign countries, and are the most 
essential instruments now remaining by which oUr manufacturing supre- 
macy can be maintained ; the other elements — cheap labor, abundance of 
raw materials, means of communication, and skilled labor — being rapidly 
in process of being equalized." 

For "iron and coal" read cotton, and for "foreign competition" 
read "domestic competition," and you will have an almost perfect 
history of Massachusetts policy for the last twenty years. 

Such, as* I understand it, is the true history of your State in 
relation to the question of 7-eal freedom of trade, real freedom for 
the men who labor, real love for the whole Union, and real 
tendency towards enabling freedmen of the South in any manner 
to profit by the " bloody struggles" through which they and we 
have so lately passed ; and which you here describe as the 
"struggle on this continent between the democratic idea of the 
Declaration of Independence and human bondage." The one great 
object to be accomplished has been that of having "cheap raw 
materials" at whatsoever cost to the miner and laborer, black or 
white ; and to that end there has been coalition with Canada and 
Carolina against the West ; with Nova Scotia and the South 
against the Centre : with any and everybody, indeed, that could be 
made to contribute towards placing the State you represent in the 
same position as regarded the Union as is now occupied by Britain 
in reference to the world at large. If it has, in any of its parts, 
been misrepresented, I shall be most glad to give publicity to any 
correction that may seem to be required. Postponing, for the 
present, all remarks thereon, I shall, in another letter, present for 
your consideration a similar review of the action of this State as 
representative of the mining interests, of all others the most im- 
portant in, and to, the Union : meantime remaining, 

Yours, faithfully, 

HENllY C. CAREY. 

Hon. ITenry TYilson. 

Philadelphia, Sept., 18(57. 



27 



LETTER SIXTH. 

Dear Sir: — 

The cotton manufacturer, at a time of serious crisis, discharges 
some of his hands, putting the rest ou half or quarter time and 
holding himself ready, on the instant when danger shall have 
ceased, to go ahead and reimburse himself for all that he had lost; 
doing this by means of higher prices consequent upon the suppres- 
sion of "domestic competition" that had been brought about. 

With those engaged in supplying fuel all is widely different. 
Mines must be kept free from water whether coal is shipped or 
not, and pumping is an expensive process. Timbers decay, iron 
rusts, and both need to be replaced. Coal that should be mined, 
but for which no market can be found, now falls, and tracks be- 
come encumbered — the general result being, as I have always 
understood, that the difference to the operator from maintaining a 
mine in idleness on one hand, or full work at the other, is so small 
as scarcely to be imagined by those not familiar with mining ope- 
rations. Stoppage to him, therefore, is almost utter ruin. To go 
ahead is little worse, and therefore is it that the mining record of 
the State furnishes an exhibition so appalling of the ruin of active, 
intelligent men to whose energetic action the country has stood 
indebted for the cheap fuel now in daily use ; that fuel to which 
your State, as well as all New England, owes the development 
of its manufacturing industry; and that by means of which, alone, 
we have so recently been enabled to maintain the great blockade, 
and to pass successfully through the war. 

The mine and the furnace, bases of the industrial pyramid, are 
always the first that are, by reason of absence of demand for 
their products, compelled to stop. They are, too, always and 
necessarily last to resume operations. The tariff of 1842 was, 
so far as the value of coal property had been concerned, wholly 
inoperative until the autumn of 1844, at which time the manufac- 
turers of Massachusetts, profiting by that annihilation of " domestic 
competition" for the purchase of cotton or the sale of cloth which 
had resulted from repeated British free-trade crises, had more 
than repaid themselves for all the losses they had suffered. So 
has it lately been ; the first two years of the tarifl" of 18G1 having 
enabled your people to make enormous fortunes, coal meanwhile 
remaining almost as stagnant as before. The war was more than 
half over before the occurrence of any essential change in the 
value of coal property or the profits of coal shippers. Were we 
now to have a restoration of the societary circulation, several 
years would be required for restoring the coal region to anything 
approaching to life and vigor ; Massachusetts meanwhile accumu- 



28 

lating hundreds of millions of dollars, and goinp^ on her way re- 
joicing. The need of the miner for regularity of the social 
movement as much exceeds that of the manufacturer as that 
of the latter exceeds that of the keeper of a grog-shop. 

To a great extent, however, the damage done can never be 
repaired. Mines having been allowed to fill up, coal has been 
abandoned. The little that could be readily obtained has been 
dragged out and sent to market, leaving enormous masses to go to 
waste. To such an extent has this been the case that it is now- 
safe to say, that for each ton that has gone to market, three have 
been utterly wasted. Therefore is it that although the whole 
quantity shipped in more than forty years scarcely exceeds, if 
indeed it equals, eighteen mouths' supply for Britain, a very con- 
siderable proportion of the region has been entirely exhausted, 
and very much of it so scratched over as to have caused damage 
that can never be repaired. The industrial history of the world 
may be searched in vain for any so wanton waste of wealth, happi- 
ness, and national power, as has, by aid of the combined efforts of 
British and Eastern free-trade believers in "cheap raw materials," 
and in the advantages of cheap labor, been perpetrated in the coal 
region of Pennsylvania. 

For all these reasons the mining regions of the country — those 
regions of which Pennsylvania is the representative — require more 
than any others, such a policy as tends to make of that Declaration 
of Independence to which you have referred, something more 
than a mere form of words — such an one as tends to give steadi- 
ness of action to the societary machine. Has Massachusetts policy 
tended in that direction ? Look, I pray you, to the exhibit 
thereof presented in my last, and satisfy yourself if much of the 
instability of the last twenty years has, or has not, thence resulted; 
and if the question might not now be fairly put as to whether, 
even to-day, the danger to the Centre of close political connection 
with an almost exclusively trading community like that you repre- 
sent, looking, as it has always done, exclusively to the cheapening 
of raw materials at the cost of their producers, is not fully as great 
as has ever been that of a connection with planting communities 
like those of Alabama or Mississippi. To my mind it appears to 
be even gceater, and it is my belief that conviction to this effect 
will, without a total change of Massachusetts policy, at no 
distant day force itself upon the minds of the people of the central 
and mining States. 

To the Union at large the development of Pennsylvania coal 
mines has been worth thousands of millions of dollars. To that it 
has been due that you have found yourself enabled to say in your 
Address that " we have triumphed ;" that " we are proud and 
strong;" that "we have lifted the country towards the heavens;" 
that " we are a greater people than ever before." But for Penn- 
sylvania anthracite not one word of this could now be said. The 
ca«se of the North would this day be " the lost cause," had the 



29 

chance of war closed the sources from which the coal has been 
derived; and yet, so far as relates to the persons who have sup- 
plied the means required for its development, it tvould have been 
very far better if not a to7i of anthracite had ever been found in the 
State; or, if found, it had been left where it had first been placed. 
Had the whole anthracite region, and the improvements of every 
kind in and leading to it, on the 1st of January, 18fil, been ap- 
praised at the price in money it would have then commanded, and 
to the sum then obtained had there been added all the rents and 
dividends to that day received, the gross amount would not, in my 
belief, have even been equal to two-thirds of the money that had 
been given to the work of development, leaving wholly out of vieio 
any price originally paid for the land itself. It had enriched all 
but those who had done the work. 

Half a dozen years having since elapsed, it might be well, per- 
haps, for you to pay a visit to the region, and satisfy yourself as 
to its present condition and its prospects in the future. Doing 
this, you would find thousands of men, victims of the " cheap raw 
material" system, wholly unemployed, and very many whose wives 
and children stand much in need of increased supplies of food and 
clothing. Looking to the machine shops to which you had been 
indebted for power to close the southern ports against blockade- 
runners, you would find them idle. Inquiring for the mechanics, 
you would learn that not only had they long been unemployed, 
but that there existed little prospect of demand for the services 
they so much desired to render. Passing around among the mines, 
you would be told that where they had not been utterly aban- 
doned, their maintenance had, for a long time past, been rapidly 
eating up all the profits on the coal supplied to the various work- 
shops by means of which republican armies had been enabled to 
achieve the great " triumph" of which you speak. Asking for 
the remnant of the troops which, on receipt of the first advice of 
danger, and in Advance of the men of Massachusetts, had so 
promptly rushed to the rescue, you might, as I think, find that 
their wives and children had become candidates for poor-house 
quarters. Having carefully studied all these things, you might 
next, perhaps, inquire what had been the effect of paralysis so 
perfect upon the owners of all this vast property, valuable as it 
had been supposed to be. In answer, you might be told, that 
you had before you, in a single valley, 70,000 acres, richer in 
coal than any other in the world, nearest of all to market, and 
best supplied with roads; which yet would give to their unfortu- 
nate proprietors little more than would be required for paying the 
additional war taxes, leaving wholly out of view those required of 
old for education, maintenance of the roads, and other local pur- 
poses. Such, in my belief, is the actual fact. 

Taking now' a bird's-eye view of the whole region, you might, 
on full reflection, be led to the conclusion that the vote of last 
year in favor of the Massachusetts system, that one which looks 



30 

to the cheapening of raw materials and to the establishment of a 
siii?;le market for the Union, had cost, to it alone, a sum more 
than, if so applied, would purchase all the cotton and woollen 
mills of your State, and all the houses of the people that in them 
were employed. 

.Let the people of Massachusetts now, for a moment, change 
places with those of this State, finding themselves and their pro- 
perty so placed, and then reflect what would probably be their 
modes of thought and action. Might they not be led to think 
that further political connection with us was a thing to be 
dreaded, and not desired. Might they not be disposed to inquire 
into the effects that had resulted from an improper accumulation 
of power in the hands of 3,000,000 at one extremity of the 
Union ? Might they not begin to see that sectionalism at the 
North was as greatly to be dreaded as sectionalism at the South ? 
Might they not be led to arrive at the conclusion, that the work 
of reconstruction could not be regarded as having been achieved 
so long as the whole nation should be required to aid in the con- 
struction of an inverted pyramid, the little apex of which was to 
find its place among the mills of Lowell and of Manchester ? 
Might they not, finally, be brought to a determination that what 
really was needed was not so much reconstruction as the construc- 
tion of a true pyramid, with a base so broad as to enable it to cover 
every part of that great farming and mining region — the richest in 
the world — which, with exception of that small portion of the mere 
surface occupied by extremists North and South, is co-extensive 
with the Union, and embraces all its territories froiji the Lakes to 
the Gulf, and from the Atlantic to the Pacific? I think they 
would. If, then, such would probably be, when so placed, their 
modes of thought, what should be now the modes of thought and 
action of those who really own the State, and who so long have 
found themselves, as between the upper and the nether millstone, 
ground between the rival States of Carolina and Massachusetts? 

Leaving you to reflect on the answer proper to be given to this 
important question, I remain, for the present. 

Yours, faithfully, 

HENRY C. CAREY. 
Hon. Henry Wilson. 

Philadelphia, September 10, 1867. 



31 



LETTER SEYENTH. 

Dear Sir : — 

Massachusetts is the type of that portion of our population 
which has its home north of the 41st parallel, and which, more 
than any other, finds in trade the chief occupation of life. In like 
manner, in Pennsylvania is found the type of that which occupies 
the territory between 39° 30' and 41°, and with which farming 
and mining, and the conversion of the rude products of both, 
make most demand for physical and mental force. Of that force, 
she is, and has always been, the representative, and therefore 
has it always been, that as she has gone so has gone the Union. 
What has been her course in the past, and what are her claims in 
the present for occupation of a position so important, it is pro- 
posed now to show. 

The Constitution, as completed by the Convention of 1787, 
gave great satisfaction to the smaller States, placing them, as it 
did, on an equal senatorial footing with the larger ones, and 
securing them against that absorption by these latter which had 
been not a little dreaded. Would, however, Massachusetts be 
content to accept as an equal in political power the little Rhode 
Island? Would Virginia be so by Delaware? or Pennsylvania 
by the little State beyond the Delaware ? 

First to answer this question was Pennsylvania, the call of a 
Convention for the purpose of considering the Constitution having 
been issued almost instantly on learning that the general Conven- 
tion had completed the work intrusted to its hands. First, with 
exception of little Delaware, she ratified it, doing this by the large 
majority of two to one, and thus setting an example of magna- 
nimity which was but very slowly followed. First of the large 
States to follow was Massachusetts, but her action long remained 
in doubt, and the majority was but 19 in a body of 355. Some 
months later came the Virginia Convention, and here the doubt 
was greater still. Ratification was, however, at length effected 
by the meagre majority of 10 out of 160. From the first New 
York had been opposed to union, and the signature of but one of 
her representatives in the Convention, that of Hamilton, is ap- 
pended to the Constitution. Very late in taking it into considera- 
tion, the opposition in the State Convention proved then so fierce 
as to make it in the highest degree doubtful if ratification could 
be at all obtained. When, however, it had been ascertained that 
nine States, the necessary number, had at length given in their 
adhesion — that formation of the Union could in no possible man- 
ner be prevented — that power had already been given to a Fede- 
ral government that might be used coercively — then, and not till 



32 

then, was ratiGcation obtained ; and yet, by little more than a 
bare majority, the ayes having exceeded the noes by only three. 

But for the prompt and decided action of Pennsylvania the 
Union would not have been formed. But for her steady adhesion 
since it could not have been maintained. By the one she earned 
the title of the Keystone State ; by the other she has, as I pro- 
pose to show, vindicated her claim thereto. 

Five and twenty years later we find in Massachusetts the first 
attempt at secession, followed a few years after by Carolina nulli- 
fication of the law, as preparation for further and more decided 
action. On both occasions Pennsylvania stood unflinchingly by 
the Union. From that hour the question of its further mainten- 
ance rested with her, and Iter alone. Had she been willing to 
abandon her Northern friends, she might, as is well known, have 
made her own terms. Offers of every kind were made to her. 
Always faithful, she treated them with that contempt they merited, 
and the records of Congress would, as I think, be searched in vain 
for evidence that she had ever, even for a moment, been willing to 
profit herself at the cost of any whatsoever of the great national 
interests. The greatest of all, the maintenance of the Union, was 
in her especial keeping; and on that head she now stands before 
the world with a record that is without a parallel in the world. 

First at the ballot-box in 18G0, she, by the vast majority given 
to Gov. Curtin, decided the question between Messrs. Lincoln and 
'Breckinridge. First again at the ballot-box in the dark hours of 
1863, she saved the Union at a time when both New York and 
New Jersey had passed under the control of sympathizers with the 
rebellion. Had she then failed, the Union would have perished. 

First in the field in 1861, her hardy miners preceded, by a 
single day, the men of Massachusetts. First to appreciate the 
importance of prompt exertion, she raised and equipped an army 
of sixteen thousand men, of whom not so much as a fifth re- 
turned from the field unharmed. Placing at the head of her 
divisions the best officers of the State, she tendered them to 
the nation, and had they been as i)romptly accepted as they had 
been promptly raised, the result of the Bull Hun battle would 
have been widely different. 

First to appreciate the importance of social organization, the 
loyal men of her commercial capital set the example of forming 
themselves into a League for controlling and directing the public 
opinion of the State — and with what effect I need not tell you. 
Jjcaving wholly out of view its other important services, it stands 
now alone as an association of individuals that had, at their own 
private cost, placed ten full regiments in the field. 

First to feel that every private, of whatsoever State, was to be 
regarded as the people's friend, that city fed, and kindly cared 
for, every man of the many hundreds of thousands who passed from 
north to south, or from south to north. 

Alone in the possession of anthracite, whose development had 



33 

caused tbe ruin of most of those concerned therein, she fur- 
nished nearly all the motive power that maintained the blockade; 
that kept in operation all the mills and shops from which the Union 
obtained its rifles and its cannon, its cloth and its ships, and most 
of its internal revenue. 

Alone in the possession of furnaces and rolling-mills in quantity 
sufficient for doing the greatly needed work, their owners, then 
so recently denounced by Eastern friends as little better than 
public robbers, supplied nearly all the iron needed by mills and 
shops throughout the Union. 

Without Mr. Lincoln, without Stanton or Grant, without Meade 
or Sheridan, without any other State, the war might, perhaps, 
have been brought to a successful conclusion. Without her no 
war could have been maintained for even a single hour. Had Lee 
succeeded at Gettysburg, he would have controlled the sources of 
national power, and the war would have been ended. Then, as 
ever, as Pennsylvania went, so has gone the Union. As she 
may in future go, so must the Union go ; all the obstacles that 
have, till now, stood in the way of combined Central and Southern 
action having been removed. 

Having thus shown what had been her course in the recent 
eventful years, allow me now to ask that you should re-read my 
last, and satisfy yourself as to what has been her compensation. 
Look at her abandoned mines! Look at her closed-up rolling 
and spinning-mills ! Then, I pray, re-peruse the adverse speeches 
that have been made in Congress in reference to her interests; 
interests a hundred-fold greater in national importance than some 
of those in regard to which our Eastern friends have been accus- 
tomed to be so eloquent. 

Leaving out of view, however, her own private interests, it is 
her duty, as Guardian of the Union, to look to those of the 
whole people, Xorth and South, East and West, and satisfy her- 
self what has thus far been the result of a commercial policy 
whose tendencies have all been in the direction of giving to 
the East an entire monopoly of the cotton manufacture, while 
depriving the most important portions of the Union of all power 
to avail themselves of the vast mineral wealth in which their ter- 
ritories so much abound. Doing this, as she must now do, she 
meets with the striking facts in regard to cotton cloth, and iron, 
that will now be given : — 

Twenty years since the domestic consumption of cotton had 
reached 600,000 bales, being the equiva- 
lent of pounds 250,000,000 

The import of foreign cottons was then about 

40,000,000 yards, equal, probably, to pounds 6,000,000 

Total, 256,000,000 

The population was then about 20,000,000, and this would 
3 



34 

give a total consumption of more tlian 12 pounds per head ; 
and a growth, in five years of full and complete protection, of 
fully 10 per cent. 

Last year the domestic consumption required, as I am informed, 

100,000 bales. This year it will need but little more than 

600,000. Taking it, however, at even 

650,000, we obtain, say, . . . pounds 270,000,000 
The import of the first four months of the 

year was 20,000,000 yards; at which rate 

we should have for the year 60,000,000, the 

equivalent of probably . . . pounds 10,000,000 



Total, 280,000,000 

"Within this period we have mined of the precious metals to 
the extent of some twelve or fifteen hundred millions of dollars. 
Nevertheless, instead of an increase, we have large decrease, 
the consumption, per head, having fallen f7-om ttvelve pounds 
down to eight; the quantity being little more than it had been 
when the pro-slavery tariff of 1846 came into practical opera- 
tion. Such have been the results of the policy which has looked 
to the cheapening of raw materials ; to the discouragement of 
" domestic competition" for their purchase ; and to the practical 
subjugation of the miners, farmers, and laborers engaged in their 
production ! The Massachusetts systeni has in view nothing be- 
yond enrichment of the capitalist, while that of Pennsylvania 
tends towards giving to labor that real freedom which results 
from growing competition for its purchase. Of the two, which, 
my dear sir, has most tended to "destroy human bondage ?" 

In 1842 our production of iron was about 220,000 tons, and our 
total consumption, of foreign and domestic, about 300,000. Five 
years later, the production, as stated by Mr. Walker, and as sub- 
sequently confirmed by the iron-masters themselves, was 700,000. 
The import was then about 100,000, giving a total of 800,000, 
and an increase, under thorough protection, in the five years that 
had then elapsed, of 167 per cent. 

Twenty years have since passed, throughout a large proportion 
of which it has pleased the representatives of ^Massachusetts to 
array themselves on the side of cotton-planters, slave owners, rail- 
road monopolists, and all other opponents of real freedom, against 
the people of the mining regions of the country, the result now 
exhibiting itself in the following facts, to wit : that the average 
product of the last three years has been but 1,100,000 tons ; that 
the quantity this year made will be less than that of the last by 
200,000 tons; that the import of the year will probably reach 
200,000, in payment for which we are sending l)y every steamer 
all the gold yielded by the I'aoific and ^Mountain States ; that the 
total consumption of the year will, in actual quantity, l)e but 65 per 
cent, greater than that of 1847, although our population has almost 



35 

doubled ; that the consumption per head, which had more than 
doubled in the protective years from 1842 to 1S47, has now fallen 
to less than it then had been ; and that, as the coiisiiinption of iron 
furnishes the best of all tests of advancing civilization, we must 
have gone forward rapidly under protection, and have been retro- 
grading ever since its abandonment in 1847. 

In facts like those here presented, in relation to both cotton 
and iron, there is found, as it seems to me, no evidence that we 
are likely long to have to boast "that we are a greater people 
than ever before ;" or that " hereafter, in the future, we shall be 
friends and brothers as we were in the morning of the Republic." 
Had the tariff of 1842 been maintained, we should be now 
making of the one 4,000,000 tons a year, and consuming or ex- 
porting in the shape of cloth, 3,000,000 bales of the other; the 
nation becoming really great, the colored population of the South, 
meanwhile, peacefully advancing with profit to themselves and 
their owners towards a freedom far more perfect than that which, 
at the cost of hundreds of thousands of lives, and thousands of 
millions of property, they have as yet obtained. 

To all this, however, in the eyes of the capitalists of Xcw and 
Old England, there would have been one objection, to wit, 
that it would have greatly raised the prices of raw materials 
throughout the South — land, labor, and the rude products of 
both. It would have made a market on the land for both 
food and cotton, and would so have facilitated consumption of 
the latter that the price would never have been below $80 per 
bale. It would have made throughout the South that compe- 
tition for purchase of human force, physical and mental, which 
w.ould have "destroyed human bondage." It would have made 
throughout the Centre and the South a network of roads that 
would have tied together all the States of the Union just as now 
are bound together those of the little and compact New England. 
Giving us, quietly and profitably to all, an universal freedom, we 
should have gone gently ahead towards the construction of a 
" more perfect Union," and would have been spared the present 
necessity for reconstruction. 

You speak of the "warm and generous greetings" with which 
the South will now be welcomed. What is there needed is, how- 
ever, something more than a mere form of words. The ballot-bos 
is of little use for filling the stomach, or for repairing roads. The 
South sees the price of cotton steadily falling, until it has now, 
in Liverpool, reached ten-pence, the equivalent of twenty-eight 
cents. Why is this ? Because, under the industrial and finan- 
cial policy now advocated by Massachusetts, the domestic con- 
sumption, instead of rising this year, as it should have done, to 
1,100,000 bales, has fallen to 650,000, at a cost to the South, ou 
a crop of 2,500,000 bales, of $100,000,000. 

Such, my dear sir, are the "greetings" thus far given by 
Massachusetts to Carolina, Georgia, and Alabama. Let those 



36 

of the future be of the same character, and the day will not 
then be far distant when you and your fellow-citizens will find 
yourselves compelled to the conclusion that you had been quite 
in error when you had said that " all our troubles had passed 
away forever." British free-trade built np slavery and made the 
rebellion. Let it be maintained, and it will defeat all your efforts 
at reconstruction. 



Yours, very truly, 

HEXRY C. CAREY. 



Hon. Henry "Wilson. 

Philadelphia, Sept., 1867. 



LETTER EIGHTH. 



Dear Sir : — 

The greatness of our country, of which, in common with so 
many of its people, you so recently have spoken, is, as you see, 
being manifested not only by a diminished power over our own 
mineral deposits, but by a diminution in the ratio of consumption, 
whether of domestic or foreign production, to population. Why 
is it that such has been, and now is, the case ? Is it because of 
any deficiency in the quantity of ores at our command ? That 
you may yourself answer this question, I here, leaving this State 
wholly out of consideration, present you with an account, by a 
recent traveller, of some of the midland counties of Virginia, as 
follows : — 

" I have rambled over the best portions of Goochland, Fluvianna, and 
Buckingham Counties, mixed freely with their people in all conditions of 
life, and witnessed an amount of mineral wealth of which you in the 
North have not the remotest conception — an amount of wealth quite equal' 
to, if not in some instances surpassing anything to be found in California. 
I know that much of what I am about to tell you may be received with 
incredulity ; but facts are stubborn things, and nothing is easier than for 
those who may doubt me to come here and look with their own eyes. 

" That Virginia contains tlie precious metals every geologist and 
mineralogist has long been aware ; and there can be but few intelligent 
readers who are ignorant of the fact that enormous fortunes have been 
extracted from isolated places of wide reputation — such, for instance, as 
the London Mine, in Buckingham County, in this State. But very few, I 
venture to say, know the vast amount of treasure which runs through Vir- 
ginia in her entire length — a distance of not less than two hundred miles, 
by at least sixty miles in width. 

" In that magnificent belt of richness, revealed to her by the same 
mighty convulsion which heaved the Blue Ridge chain of mountains 
from her womb, are to be found, in the greatest abundance, gold, silver, 
copper, iron, platinum, cinnabar, lead, plumbago, tin, coal, roofing-slate of 
the most durable kind, marble of the rarest beauty and perfection, and a 
variety of other valuable mineral substances — such as gypsum, limestone 
soapstone, hone-stone, equal to anything Turkey ever produced — too long 
for euumerution." 



37 

What is here said of these few counties is almost equally true 
in reference to the whole uplands of the South, fuel and ores, and 
especially iron ore, aboundinjij to an extent wholly unknown in 
any other country of the world ; and it is in behalf of that region 
of marvellous mineral and metallic wealth, as well as in her own, 
that Pennsylvania has asked protection. The idea of preventing 
the growth of " domestic competition" for the purchase of ores, or 
for the sale of iron, finds, as I am happy to say, no place in her 
record. 

Among the richest of the States in these respects is Alalwma, 
fuel abounding and her ores being fitted, as I understand, for 
production of iron fully equal in quality to the very best obtained 
in Pennsylvania. 

Crossing the Mississippi, we find in T^orth Louisiana, accord- 
ing to a report recently made to the Legislature by the Hon. Mr. 
Robertson, 

" Iron ore so abundant as absolutely, at some points, to obstruct 
agriculture. Vast heaps of rich ores may be seen piled up in the fields. 
In De Soto and West Nachitoches is a vast field of granular and argilla- 
ceous ores, many miles in extent. This iron field lies north and north- 
east of Pleasant Hill, and all the necessary concomitants for the success- 
ful manufacture of iron are to be found in convenient proximity and in 
great abundance. A large portion of Claiborne and Bienville is an im- 
mense iron bed. Jackson and Winn are also rich in their beds of iron 
ore. The superficial surface ores, brown hematite and granular, of these 
parishes, would supply hundreds of furnaces for years to come. Seven 
miles east of Minden is a rich field of iron, lying for miles around the base 
of Fort Hill, a huge hill which rises above tlie surrounding country in 
three distinct and broad terraces. Around the outer edges of these ter- 
races are natural embankments of arenaceous boulders, each embankment 
some seven or eight feet in height. This bed of ore extends to within 
four miles of Minden on the northeast, and from that point it may be con- 
tinuously traced through Mount Lebanon, and nearly to Sparta, in Bien- 
ville parish. The region around Mount Lebanon is peculiarly rich in 
valuable ores." 

From the iron mountain of Missouri to the near neighborhood 
of the Gulf such ores abound, and in a profusion of which the 
European world has no conception, yet is our consumption, per 
head, less than it had been when Congress, under the lead of 
Mr. Walker, abandoned the road towards freedom for all, black 
and white, to re-enter upon that pro-slavery one to which we had 
been indebted for the numerous crises which had occurred between 
1837 and 1842. 

These are striking facts, and such as would, in any other 
country, command the consideration of men professing to be states- 
men. Here, however, they are not regarded as sufficient to otl'set 
the demand for cheap iron made by Massachusetts makers of pins 
or penknives who fail to see that the greater the " domestic com- 
petition" for the sale of their raw material, the cheaper must it 
become, and the greater the growth of the domestic commerce 
the more must be the demand for both pius and knives. 



38 



Turning now to France, badly supplied with ores, and com- 
pelled to look for coal to Belgium and to Britain, we find the 
domestic production and total consumption, foreign and domestic, 
in the last six years, to have grown as follows : — 





PRODrCTION. 


CON.SCMPTIOS. 




Pig— tons. 


Iron — tons. 


Tons. 


Tons. 


1860 . . 


^80,000 


560,000 


935,000 


500,000 


1S61 . . 


890,000 


672,000 


1,030,000 


550.000 


18(32 . . 


1,070.000 


700.000 


1,270,000 


788,000 


1863 . . 


1,150,000 


790.000 


1,330.000 


790,000 


1864 . . 


1,175,000 


795,000 


1,270,000 


735,090 


1865 . . 


1,191.000 


848,000 


1,320,000 


810,000 



With no perceptible increase of population, the average in- 
crease of these quantities is abont 50 per cent. In twenty years 
of British free-trade, and its attendant crises, our own has retro- 
graded in its ratio to numbers, when it should have quite quadru- 
pled. Seeing all this, I find myself unable to see how we can fairly 
make the boast, that " we are greater than we ever were before." 

It may be said, however, that is the free-trade period, and so it 
will be said by those who find their profit in blinding our people's 
eyes to the fact that French free-trade meant merely the passage 
from prohibition to highly protective duties ; and, that the pro- 
tection this day enjoyed by those engaged in developing the 
mineral resources of France, is fully equal to that given by our 
tariff of 1861, before internal taxes had so nearly nullified the 
little that had been granted. In proof of this permit me to 
refer you to the following comparative table : — 



Names of Articles. 

Iron, pig, and old cast iron 

Iron, old broken wrought . 

Iron, bar .... 

Iron, railroad 

Iron, sheet 

Iron manufactures ; pipes 

solid columns 
Iron mauufac. ; heavy wrought 
Iron manufactures ; small wares 
Iron manufactures ; cut nails 
Iron manufactures ; wr't nails 
Iron manufactures ; anchors, 

chains, cables 
Iron manufactirres ; tubes of 

wrought iron, large 
Iron manufactures ; tubes of 

wrouglit iron, small 
Steel in bars of all kinds . 
Steel in sheets above l-12th of 

an inch thick 
Steel in sheets under l-12th of 

an inch thick 
gteel tools in pure steel 
Steel sewing needles 



and 





Trench dnties under 




Quanti- 


the Keciprocity 


U. S. duties under 


ties. 


treaty in American 
money. 


the Morrill tariff. 


ton. 


$4 39 


$3 00 


ton. 


6 35 


6 00 


ton. 


13 68 


15 00 


ton. 


13 \ii 


12 00 


ton. 


25 41 to $31 28 


20 to S25 


ton. 


8 30 


11 20 


ton. 


17 58 


20 00 


ton. 


29 39 


22 40 


cwt. 


97| 


1 12 


cwt. 


1 46.1 


2 24 



ton. 19 54 



ton. 



25 40 



30 to $33 
44 80 



ton. 
lb. 


48 85 
1 3-lOc. 


44 80 

11 and 2c. 


lb. 


2c. 


2c. and 15 ^c 


lb. 
lb. 
lb. 


no. 

31c. 

8| to 17^0. 


2.} and 15 ^c. 
30 %' cent. 
20 fi cent. 



39 

Of far more im^)ortance, however, than any moderate difference 
in the amount of duty, is the fact that in France development 
of the mineral resonrces of the country is held to be a matter of 
national importance. Canaille like those, jew and gentile, gra- 
tuitously supplied by England for teaching our legislators how to 
obtain cheap irou, are there not tolerated, Frenchmen having 
too much self-respect to permit such interference in their domestic 
arrangements. The iron man of France can, therefore, go confi- 
dently ahead, making the large investments required for facilitating 
cheap production. Here, on the contrary, as if with a determina- 
tion that iron never shall be cheap, the sword of Damocles is 
always held suspended over him, and he perishes at last for 
the aimple reason that no one dares to lend him the amount re- 
quired for making the improvements that are needed. Had our 
legislation in the past e.xhibited anything like common sense, or 
real national feeling, we should have now no need for measures of 
reconstruction. 

How rapid has been, and now is, the German progress will be 
seen on an examination of the following facts : In 1850, the pro- 
duct of steel was valued at $350,000, Ten years later it had 
reached $1,400,000. Five years still later, having meantime en- 
dowed the world with the great gift of the Bessemer process, the 
figure reached was $10,000,000. In 1850, the total value of pig 
and wrought iron was but $15,000,000 ; whereas, in 1865, it had 
grown to $55,000,000; and all this vast increase was but prepara- 
tion for new and further movements in the same direction, arrange- 
ments, as we are told, having recently been made for great exten- 
sion of operations. 

Five and thirty years of protection have sufficed for construct- 
ing the greatest empire of Europe — a true pyramid, based upon 
the mineral and metallic resources of the State. The same five 
and thirty years have been by us expended in the effort to create 
an inverted pyramid with its apex resting upon the cotton and 
woollen mills of Massachusetts ; and with such success that, after 
expending thousands of millions of dollars, wasting property to 
the amount of other thousands of millions, and destroying lives to 
the extent of hundreds of thousands, we are now engaged in an 
effort at reconstructing the rickety edifice, taking no note of the 
fact that its permanent existence would be in opposition to all 
experience, as it would be certainly opposed to all the teachings 
of science. 

"Were it this day possible so to raise the duties on iron, and 
commodities of which iron is the chief component, as to make 
them almost prohibitive, at the same time giving assurance that, 
despite the claims of pin or penknife-makers, the protection so 
granted should endure for even one decade ; were it possible, I 
say, to do this, the close of that period would see iroii clieaper 
here than elsewhere in the world ; we should then export iron 



40 

instead of gold ; and then it might be possible tb speak with truth 
of our existing greatness. 

Three and thirty years since, when the protective tarifiF of 
1828 had enabled us to extinguish the whole national debt, even 
that which bore an interest only of three per cent. ; when the 
treasury was full to overflowing ; when, for the first time, we had 
achieved a real independence ; wheu immigration was for the first 
time growing rapidly ; then, and then only, could we honestly 
have made any claim to greatness. Seven years later the country 
was so utterly without credit that the same bankers who had been 
paid, at par, a loan at three per cent., utterly refused to lend a 
single dollar at six per cent. Where was then our free-trade 
greatness ? 

Five years later, the tariff of 1842 having meantime reconstructed 
the country, we had become strong enough to dictate law in the 
halls of the Montezumas, and to add California to the Union. 
Then, for the second time, might there have been made some little 
claim to the idea of greatness. Little more, however, than a 
dozen years of British free-trade next sufficed for rending the 
Union asunder and placing both the parts at the feet of Britain. 

Two years since, when protection and the greenback at home, 
and British hostility abroad, had combined for promoting mate- 
rial and moral independence, and had enabled us to pass safely 
through the war, we might again have laid some claim to be con- 
sidered " great." 

Where, however, are we now ? We have a bigger country, 
having added Walrussia to our territories. We have a larger 
foreign debt than any country of the world. We pay a higher 
rate of interest than any other with claim to be considered civil- 
ized. We produce more of the precious metals than any other, 
and so perfect is our independence that not a dollar of either gold 
or silver can be retained. We have the friendship of Englaud, 
and it clings to us as pertinaciously and destructively as did the 
poisoned shirt of Nessus to the shoulders of Ilercules. Having 
closed our rolling-mills, we now import iron at the monthly rate 
of $2,000,000, and pay for it in gold-bearing bonds. Having 
closed our glass-houses, we now import whole cargoes of coal and 
sand in the shape of window-glass, and pay for them in the gold 
of California. Having destroyed the demand for coal, we are 
now destroying the powers of the land itself by which that coal is 
yielded. Having reduced the consumption of cotton to little 
beyond the point at which it had stood twenty years since, and 
having thus compelled so large an export as to have already 
reduced the British price to ten-pence, we have imposed a tax 
upon our reconstructed brethren of the South, of probably 
$100,000,000, and this at a time when they specially need our 
aid. 

Such are the evidences, as they present themselves to my mind, 
of the declining greatness achieved since the peace. Believing 



41 

that before the close of another decade, if the Massachusetts 
policy be maintained, you will see the country arrive at a condi- 
tion even worse than that of 1861, at that peVfection of littleness 
which, forty years since, was exhibited by what is now the really 
great and powerful Germanic empire, I remain, with much regard,* 

Yours, very truly, 

HEXRY C. CAREY 
Hon. Henry Wilson. 

Philadelphia, Sept., 1867 



LETTER NINTH. 



Dear Sir: — 

Half a century since the vast country west and north of the 
Ohio, with its extraordinary wealth of soil, that soil, too, under- 
laid to an extent elsewhere unknown with coal and ores, contained 
but half a million of inhabitants. From that time to the present 
its population has gone on increasing until it numbers now a dozen 
millions; yet, during nearly all that time has it been required by 
the allied Southern and Eastern States, that its farmers should alto- 
gether fail to profit of the great mineral treasures by which they 
had been everywhere surrounded, and by aid of which they would 
long since have been enabled to create a great domestic industry 
and a varied agriculture. The one desired that food might be 
low in price that they might cheaply feed their negroes ; the other 
desired " cheap raw material" of every kind, that they might ob- 
tain and maintain a monopoly of the cotton manufacture. Com- 
pelled thus to go abroad for iron, all the materials of which lay 
beneath their own proper land ; compelled, too, to send their wool 
abroad to be returned in the form of cloth — the people of that vast 
territory have found themselves limited in their cultivation to those 
white crops of which the earth yields but little, and which, for that 

* Since writing the above I have received a very interesting account of 
the mining operations of Belgium, giving the following facts : — 

From 1850 to 1863 the increase of production was as follows — 

Of coal, per cent. .......... 100 

" mineral, per cent. 100 

" forges and mills, per cent. ....... 300 

" foundries, " 250 

In proportion to the numbers of her people Belgium now produces eight 
times as much coal as France, between twice and three times as much as 
Prussia, only one-fourth less than Great Britain, and the quantity doubles 
every tifteeii years. This, too, occurs in a country whose coal fields 
scarcely exceed in their extent those of our anthracite region alone, and 
whose population increases so very slowly that a century and a half would 
be required for its duplication. 



42 

reason, could alone bear carriage to distant markets. Green crops, 
of whicli the earth yields by tons instead of bushels, and by means 
of which the soil is best prepared for white ones, have, as a rule, 
been interdicted, the' cost of transportation to distant cities having 
been greater than the prices that could be obtained when those 
cities had been reached. The place of consumption being far dis- 
tant from that of production no manure could be returned upon the 
land ; and, as a necessary consequence of this, it became yearly 
poorer than before. The greater its poverty the more imperious 
became the necessity for change of place, and thus it has been 
that a few millions of people have been scattered over a surface 
capable of feeding half the population of the earth. The more 
they scattered the more did they become subjected to damage to 
their crops resulting from winters of so intense a cold as to compel 
them to postpone to spring the sowing of their various seeds. The 
more they scattered over the prairies the greater became their need 
for fencing, and for their own protection against the winter's blast, 
and the greater became the difficulty of bringing from a distance 
the lumber so much required. The more they scattered the more 
were they compelled to place their dependence on a single crop, 
and the greater their losses resulting from excess of moisture or 
of heat. The more they scattered the greater became the need 
of roads, and the greater the difficulty of obtaining iron, the ores 
of whicli, and the fuel with which to smelt them, lay beneath 
their feet; they themselves, meanwhile, wasting annually a larger 
amount of force, physical and mental, than would have been re- 
quired for erecting furnaces, forges, and rolling mills, in quantity 
sufficient to supply with iron all the people who could then, or 
now, be found between the Rocky Mountains and the Atlantic. 

The single form that agricultural improvement has taken 
throughout almost the whole territory has been that of machinery 
for facilitating the reaping of the croi)s, large or small, that have 
been yielded by land from which the soil has been, and is being, 
annually carried off to distant markets. With every such improve- 
mejit less and less has been consumed at home, the result exhibit- 
ing itself in the fact, that the average yield of wheat by the origi- 
nally fertile soil of Ohio, Indiana, and Illinois, scarcely exceeds, if 
indeed it equals, a dozen bushels to the acre. 

Twenty years since Britain offered to the world, as consideration 
for abandoning all further efforts at industrial independence, a 
repeal of her Corn Laws, thereby granting to them the great boon 
of supplying her few and impoverished artisans with food. Ger- 
many, nevertheless, went straight ahead, and so did France, de- 
veloping their mineral resources, and thus making a market on the 
land for all its products, the result exhibiting itself in the fact thut 
not only has their consumption of iron increased twice, if not even 
thrice, more rapidly than the nuniliers of their respective popula- 
tions, I)ut that they have fairly distanced Britain in the importance 
of their inventions, the beauty and the excellence of their iron 



43 

fabrics. With ns the course of tbin,c]i;s was different; we having 
promptly swallowed the bait that had so skilfully been proffered. 
Abandonino; the policy of freedom under which our domestic con- 
sumption of cotton and our domestic production of iron had, in 
the short space of four years, almost trebled, we returned to the 
pro-slavery British free-trade system, the result exhibiting itself in 
the facts that not only do we now consume less iron per head than 
we did twenty years since, but that our consumption of cotton is 
scarcely more in quantity than it then had been. 

Durinijf nearly the whole of this long period Massachusetts has 
cried aloud for cheap raw materials, whether corn or cotton, coal, 
tin, lead, or iron, and to the end that they might be "cheap" she 
has coalesced with British iron-masters in waging systematic war 
upon the greatest of all national interests, coal and iron. The 
result, so far as regards the first, exhibits itself in the fact that, 
with beds of fuel so vast and rich as to be without a parallel in 
the world, the quantity this year mined will scarcely exceed, if, 
indeed, it equals, the addition made to the British quantity as com- 
pared with that of seven years since. 

Such having been the price paid for the privilege of underwork- 
ing the British agriculturist and supplying the British artisan with 
"cheap" American food, we may now, for a moment, look to see 
to what extent the end in view has been obtained. 
At the date of the repeal of the Corn Laws the import of wheat 
into Great Britain, as given in an article just now published, 
was l,141,9Gi[ quarters, or, in round numbers, 

about bushels 10,000,000 

By 1850 it had grown to 44,000,000 

In 1858 it was 43,000,000 

" 1860 " 59,000,000 

" 1861 " 70,000,000 

" 1862 " 93,000,000 

" 1865 " 48,000,000 

" 1866 " . . 60,000,000 

Of these enormous quantities how much have we, owners of 
what we had been accustomed to look upon as the granary, par 
excellence, of the world, on an average of the last ten years, sup- 
])!ied? i\i?,i sixteen millions, that being the mess of pottage for 
which Mr. Secretary Walker sold our birthright, and that being 
the great trade in whose behalf our Massachusetts friends require 
that we close our mines and furnaces, and import, duty free, our 
railroad bars! For every dollar's worth of f)od that we send to 
Britain, France sends, as I think, three or four. Why? Because 
France avails herself of her mineral resources, few and poor as 
they are, and thus creates a real agriculture 1 Because, refusing 
to profit of the almost inconceivably vast mineral wealth at our 
command, we compel our farmers to export their soil to distant 
markets, with daily diminution in the power of the land to yield 



44 

return to labor! Because French policy tends to "stimulate 
domestic competition" for purchase of the rude products of the 
field, and for the sale of finished commodities! Because, with us, 
the extreme North and the extreme South have always been 
united in a policy whose object has been that of compelling the 
West to look South or East, and not homeward, for any market for 
its products. Because the pin and pen-knife makers of the East 
can command the votes of Massachusetts, at the cost of those who 
mine the coal and produce the iron by means of which blockades 
have been maintained. 

The "cheap raw material policy" having now, with slight ex- 
ception, prevailed for twenty years, let us for a moment inquire 
into the progress thus far made. 

In the first four months of the present year the total of our 
domestic exports was, in round numbers, $184,000,000, the equiva- 
lent of $120,000,000 in gold. 

Of this Cotton furnished .... $108,000,000 

Gold 19,000,000 

Coal-oil and oil-cake 6,000,000 

Tobacco 6,000,000 

Breadstufifs and provisions .... 22,000,000 

Lumber, rosin, and turpentine . . . 6,000,000 

Whale-oil 1,000,000 



Making a total of $168,000,000, 

the products of little else than the rudest labor, and leaving but 
$16,000,000, the equivalent of $11,000,000 in gold, as the repre- 
sentative of an amount of industrial capacity that has no equal in 
the world, and that ere this, under a system tending to " stimu- 
late domestic competition," would have placed us in a position to 
convert the whole of this food and cotton into cloth ; to give to 
the world $50,000,000 per month of commodities whose produc- 
tion would be tending daily towards stimulating into full activity 
all these faculties for whose development we maintain our public 
schools. 

Men and nations, my dear sir, become greater as they more and 
more acquire the power of self-direction. France finishes all her 
commodities, and can go with them where she will. We, more 
enlightened as we think ourselves to be, send forward all our pro- 
ducts in their rudest form, and go with them lohere we tyiust. The 
one requires the world to come to her, and determines the price 
they ynust pay; the other, always seeking buyers, piles up her 
goods in Liverpool and Havre, and leaves to French and English 
manufacturers the power to determine at ichat prices they will 
consent to take them. 

1\\ all this you may see proof that " wo are really greater 
than we ever were before." If growing dependence on the will 
of foreign traders can be taken as evidence of growing greatness, 



45 

then are you wholly in the right. If growing independence is to 
be taken as such evidence, then are the Germans in the right, and 
the policy they pursue is precisely the antipodes of that now advo- 
cated by the literary and political representatives of Massachusetts. 

Yours, truly, 

HENRY C. CAREY. 
Hon. Heney Wilson. 
Philadelphia, April, 1867. 



LETTER TENTH. 



Dear Sir: — 

Even before the war a great change had already commenced in 
regard to the sources from which the northern supplies of cereals 
were to come, Tennessee and North Carolina furnishing large 
supplies of wheat greatly superior in quality to that grown on 
northern lands, and commanding higher prices in all our markets. 
From further south, and almost to the Gulf, we now learn from an 
important public document before referred to, that — 

" Wherever the United States cavalry camped in Louisiana, during the 
war, wheat, rye, oats, and barley sprouted from the seed scattered where 
they fed their horses, and, wheu undisturbed, headed finely and ripened 
well — the extraordinary size and weight of the wheat and barley heads shoiving 
that the soil was peculiarly adapted to their growth. A gentleman, residing 
in the swamps of Assumption, assures me," says its author, " that he has 
raised wheat and rye for twenty-two years, and thai he has never had a failure ; 
both grains frequently made forty bushels to the acre. I have cited these in- 
stances to show that wheat has been raised, time and again, under all 
sorts of circumstances, and on every kind of soil in Louisiana." 

In other cases as many as 60 bushels to the acre have been 
obtained. It ripens in May, and its market value may be judged 
from the facts that while — 

" The daily quotations show that Southern flour, raised in Missouri, 
Tennessee, and Virginia, brings from three to five dollars more per barrel 
than the best New York Genesee flour; that of Louisiana and Texas is far 
superior to the former even, owing to the superior dryness, and the fact 
that it contains more gluten, and does not ferment so easily. Southern 
flour makes better dough and maccaroni than Northern or Western flour; 
it is better adapted for transportation over the sea. and keeps better in 
the tropics. It is therefore the flour that is sought after for Brazil, Cen- 
tral America, Mexico, and the West India markets, which are at our doors. 
A barrel of strictly Southern flour will make twenty pounds more bread 
than Illinois flour, because, being so much dryer, it takes up more water 
in making up. In addition to this vast superiority of our grain, we have 
other advantages over the Western States in grain growing. Our climate 
advances the crop so rapidly that we can cut out our wheat six weeks 
before a scythe is put into the fields of Illinois ; and being so near the 
Gulf, we avoid the delays in shipping and the long transportation, the 



46 

cost of which consumes nearly one-half of the product of the West. These 
advantages, the superior quality of the liour, the earlier harvest, and the 
clieap and easy sliipraent, enable us absolutely to forestall the West in the 
foreign demand, which is now about 40.000,000 of bushels annually, and 
is rapidly increasing, and also iu the Atlantic seaboard trade, ilassacliu- 
setts, it is calculated, raises not more than one months' supply of flour for 
her vast population. New York not six month's supply for her population, 
and the other Atlantic States in Hive proportion. This vast deficit is now 
supplied by the Western i^tates, and the trade lias enriched the West, and 
lias built railroads in every direction to carry towards the East the gold- 
producing grain. We can, if we choose, have a monopoly of this immense 
trade, and the time may not be far distant when, in tlie dispensation of 
Providence, the West, which contributed so larjeh/ to the uprooting of our 
servile !<ysteni and the destruction of our property, will jind that she has forced 
us into a riralrij atpdnst which she cannot compete, and that she will have to 
draw not onli/ her supplies of cotton, sugar, and rice, but even her breadstuff's 
from the South." 

Is it, however, for breadstuffs alone that the North is likely, 
with our present exhaustive cultivation, to be compelled to look 
to the South? It is not; the sweet potatoe, which can be grown 
on "every acre in Louisiana," and of which the yield, even at pre- 
sent, "averages 200 bushels to the acre," having, during the war, 
been fully tested in feeding hogs, and having, quantity and quality 
of the pork considered, been found, pound for poimd, fully equal 
to Indian corn, of which the average yield of the States north 
and west of the Ohio is less than a third as much. With 
careful cultivation it has been known to yield more than 600 
bushels, or six times as much as can, with equal care and close to 
Eastern markets, be obtained of the great staple of the North, 
thereby enabling those who are in the future to cultivate those 
rich Southern lands wholly to supersede the Northwest in the 
work of supplying animal as well as vegetable food to the people 
of the tropics and of Europe. 

Sixty acres to the hand, it is said, may be cultivated in grain. 
Combining with this the raising of cotton the effect of diversili- 
catiou of agricultural pursuits is thus exhibited: — 

" With one-fifth of our former labor, it is, therefore, clearly practicable 
to put every inch of cleared land under cultivation. Thus, under the pre- 
sent system of labor, a cotton or sugar plantation of 600 acres would require 
loo hands to cttltivate it exclusively in either cane or cotton, for two years' 
experience has taught us that five acres to the hand is all that can be suc- 
cessfully accomplished in these crops, while twelve or fifteen active hands 
will suffice to cultivate and take olf fifty acres of cotton and 450 of wheat, 
rye, or barley, by the aid of the well-tried, improved implements in every- 
day use at the North and West, and at much less expense for teams than 
would be required if cotton alone were planted." 

Turning now to fruits, we find the State under consideration, 
which is, however, to a great extent the type of the whole of those 
bordering on the Gulf, to be capable of yielding "in unusual pro- 
portion nearly all those of the other Slates," and very many of 
the tropical ones. 



4T 

" Oranges, superior to tlaose of the West lurlies, are grown in all the lower 
portion of the State, and are rarely hurt by the frost. The trees attain, in 
some places, a great size. I measured one at Lake Charles, in Calrasieu, 
eleven years old, which was over thirty feet in height, and, at a foot above 
the ground, was three feet five and a half inches in circumference, and 
wliii-h, I learned, had produced near 2,500 oranges the past season, one of 
which weighed eighteen ounces. Bananas have been largely cultivated 
during the last ten years, and now adorn every dwelling. Citrons, mespi- 
las, lemons, jujubes, pomegranates, guavas, and even pine apples, are 
cultivated in all Lower Louisiana, while the fig, the pear, the api^le, the 
peach, the plum, the apricot, the nectarine, the quince, the cherry, the 
almond, and every variety of grape and currant, grow in every part of 
the State. Dewberries, blackberries, mulberries, gooseberries, huckle or 
whortleberries, strawberries, and raspberries, are found as wild and indi- 
genous fruits. The peaches, pears, and figs of Louisiana are peculiarly 
sweet and luscious. Fruit-raising is one of the most remunerative em- 
ployments." 

Hops may be seen " growing thriftily and bearing abundantly." 
The State is " prolific in native dye-plants." In its forests abound 
" nearly every variety of tree known in the United States." For 
cattle raising it is perhaps the finest country of the world. Turn, 
therefore, in which direction we may, we find that nature has pro- 
vided for that diversification of demand for human service for 
which we look in vain amid the fields of northern States. Seeking 
for it in these latter, we find ourselves compelled to look below 
the surface, and there alone ; yet there it is that Massachusetts, 
anxious to protect her pin and pipe makers, insists that it shall 
not be sought. 

The war has already made great changes, yet are they, as it 
would seem, but preliminary to greater in the future, as you will 
see by the paragraphs that follow ; — 

"Vast numbers of freedmen could be hired for one or two months at a' 
time, for liberal day wages. This system is in conformity with their ideas 
and notions of work ; they reluctantly contract for a year. Hye, barley 
and buckwheat have been tried in Louisiana. Barley and buckwheat are 
both natives of a southern climate, and flourish remarkably well here. 
In Texas, during the past year, the papers slate that eighty-fire hushels of bar- 
ley were made to the acre in Central Texas. Sixty bushels could easily be 
made here, and as it is superior to the northern barley for biewing, the 
fourteen breweries of New Orleans would alone consume vast quantities of 
it. Barley, as compared with corn, is a better food for stock, particularly 
work stock, as it is muscle producing and does not heat the system like 
the oil or fat producing property of corn, and while it produces three times 
as much to the acre, of grain, the stock consumer all of the straw, A hand 
can cultivate mucli more ground in barley than corn, an<l it needs no 
working after planting. Grain growing would not only be profitable to the 
planter, but it would build up New Orleans, and make her the greatest 
city on the continent. What New Orleans lacks is a summer trade ; her 
business has been heretofore compressed into six or eight months. After 
the cotton and sugar crops had been received and disposed of, the mer- 
chants and tradesmen had nothing to do. Most of them went North with 
their families, leaving New Orleans a prey to epidemics, when a small 
j)ortion of the very money which they had earned in New Orleans, and 
were spending so lavishly abroad, would have perfected sanitary measures, 
which would have protected her from the epidemics. During this seasou 



48 

of inactivity nearly all brandies of business are suspended ; the mercliant 
must, however, pay house rent, insurance, clerk's hire and other inci- 
dental expenses ; must lose interest on his investments, and have his 
goods and wares damaged by rust, dust, moth and mould. If the cultiva- 
tion of grain were beguu and encouraged around New Orleans, grain would 
pour in during the month of May, and the summer months, and would 
fill up this fatal hiatus in our trade. 

" The merchant would be compelled to reside here in summer as well 
as winter, and he would be forced on his own account to lend his time and 
money towards building up the city and improving its health. 

" Every branch of business would be kept up then throughout the 
whole year, and out own steamships would supply the countries south of us 
with provisio7is, and we should not, as now, be compelled to import coffee by 
way of Cincinnati. Northern and European emigrants, knowing that our 
grain growing was more profitable than at the North, and that they could 
grow (/ruin loithout working during the summer months in that sun they have 
been wronffully taught to dread, would flock to our lands ; and of course, 
where provisions and all other necessaries of life would be cheap, manufactures 
ivonld necessarily spring up, to work up the raw materials so abundant here. 
I have thus lengthily urged the cultivation of the cereals, because I find 
so little is known among the most intelligent, as to the capabilities of our 
State in this respect, and because, too, I think that therein lies the true 
secret of recuperation and permanent prosperity for our people. It is a 
business which all classes of agriculturists may profitably engage in, from 
the poor farmer of the pine hills to the rich planter of the coast. It is a 
business in which every landholder, lessee, laborer, mechanic, manufactu- 
rer, tradesman, merchant, ship-owner, and, indeed, every citizen, is deeply 
interested, as it is a question of large profits and cheap bread, and the 
State of Louisiana and the United States have a deep concern in it, as 
large owners of land in the State. I have placed grain first in the list of 
productions, for looking to the future, 1 am sure that grain will become our 
leading staple, and that New Orleans is destined to become the leading grain 
market of the world." 

Such being the Southern anticipations, the question now arises, 
are they likely lo be realized ? That you may yourself answer 
this question, I ask you now to look again at the West and North- 
west and see — 

First, that as a consequence of that Massachusetts policy which 
requires that raw materials of every kind, coal, lead, and iron not 
excepted, shall be low in price, the West has thus far been wholly 
deprived of power to bring the miuer and the manufacturer to 
the side of the farmer, and thus to relieve its producers from the 
burthensome and destructive tax of transportation.* 

Second, that, as a necessary consequence of this, the powers of 
the soil have gradually diminished and are diminishing, with con- 
stantly increasing necessity for scattering over more widely ex- 
tended surfaces, with steadily augmenting tax for commissions and 
for freights, and constantly increasing exposure to loss resulting 
from excess or deficiency of moisture, from excessive heat or cold. 

* At the moment at which I write I find notice of sales of corn in Iowa 
at 8 cents per bushel, yet does the State abound iu ores whose develop- 
ment would make demand for all the food that could be raised. 



49 

!N"eaTly twenty years have now elapsed since the then head of 
the Patent Office, an eminent agricultarist, estimated our "animal 
waste" of the mineral constituents of corn, under the "cheap raw 
material" system, at the equivalent of 1,500,000,000 bushels of 
corn, and told the nation that if such " earth butchery" were con- 
tinued, the hour would soon arrive when "the last throb of the 
nation would have ceased, and when America, Greece, and Rome 
would stand together among the ruins of the past." From tiiat 
hour to the present, with but slight exception, we have moved in 
the same false direction, the result now exhibiting Itself in the fact 
that tbe great West, the "granary of the world," has so little food 
to spare that the whole amount of our export is much less than is 
now required for payment of the mere interest upon debts con- 
tracted in Europe for cloth and iron that should have been made 
at home. This present season has been a fine one for the farmer, 
and for months past have we been assured tiiat it would in a great 
degree compensate for the short harvests of the past two years ; 
but the actual result now presents itself in the following passage 
from the Tribune of the day on which I write : — 

"Advices from the West in regard to wheat are unsatisfactory. An 
extra yield has ceased to be talked about, and the fact is apparent that 
it threshes out poorly in comparison with the estimates before harvest. 
Measurement shows 12 and 14 bushels where 25 per acre were expected, 
and the increased breadth sown will scarcely make up for the deficit in 
yield. So far as wheat is concerned, cheap bread cannot be realized from 
the crop of 1867, nor are the prospects better for corn at the present mo- 
ment. Already Western experts are buying old corn on speculation, paying 
$1 25 per bushel, against 83 cents in Se^jtember, 1866. This state of things 
is in marked contrast with the general expectations forty days since, and 
will modify many business calculations then made. Instead of an abun- 
dant harvest of wheat and corn to make cheap bread, and consequently 
cheaper labor, high prices appear inevitable, with all the attendant disas- 
ters. Instead of a crop which would tax the rolling stock of railroads to 
their utmost, and enable them to clear their books of floating debt, man- 
agers are brought face to face with the fact that there is not an average 
crop, and that its transportation will yield little profit. To traders this 
chauged appearance of the crop is of vital importance. Instead of a full 
crop to be used in the payment of old debts and in exchange for new 
commodities, producers from this year's labor promise to be left where old 
debts must be neglected, and new purchases made sparingly." 

Need we desire better evidence than is here furnished that the 
raising of raw produce for the supply of distant markets is the 
proper work of the barbarian and the slave, and of those alone ? 
I think not. Twenty years of the Massachusetts system — that one 
which claims for its own people all tbe protection they need, while 
denying it to the people of the Centre, the West, and the South — 
that one which refuses to "stimulate domestic competition" for the 
purchase of raw products, or the sale of finished ones — have suf- 
ficed for so reducing the pOwer of the whole body of loyal States 
to maintain commerce with the outer world that their lohole exports, 
gold and bonds excepted^ scarcely more than suffice for ineetin^ the 
4 



50 

demands of Europe for interest and freights — leaving but little 
for payment even of the travelling expenses of our people, now 
amounting to scarcely less than $100,000,000 per annum. 

The remedy for all this has been provided by nature, which has 
underlaid the soil with coal and ores, but Massachusetts wars 
upon the miner and thus compels the farmer still further to exhaust 
the soil by sending wool and corn in their rudest forms to distant 
markets, there to be exchanged for other wool and corn in the 
forms of cloth and iron. 

At the South nature has provided for removal of all existing diffi- 
culties, having placed the farmer in such position that not only is 
he nearer to the great markets for his products in their original 
forms, but that he may convert his wheat and his sweet potatoes 
into cotton, into pork, oranges, or any other of the numerous fruits 
above referred to, for all of which he finds an outlet in the various 
markets of the world. Seeing these things, and seeing further, 
that its whole upland country presents one of the most magnifi- 
cent climates of the world, can it be doubted that the day is 
at hand ichen emigration to the South and Southicest must tahe the 
place noio occupied by emigration to the West, and ichen power is to 
pass from the poor soils of tlie Northeast to those richer ones which 
now offer themselves in such vast abundance in the Centre, the South, 
and the Southwest ? As I think, it cannot. In my belief the time 
is fast approaching when northern intelligence will be everywhere 
found engaged in teaching southern men how they may be best 
enabled to square their long-running account with the men of 
Massachusetts ; and when almost every town and village of the 
South will be found offering protection to the makers of pins and 
pipes, nails and bars, tubs and buckets, shoes and cloths, in the 
manner here described as having but now occurred in Maine : — 

"The town of St. Albang, Somerset County, Me., recently voted to ex- 
empt from taxation, for the space of ten years, any sum not less than ten 
thousand dollars that might be invested in any permanent manufacturing 
business." 

That such is now the tendency of the Southern mind is clearly 
obvious. Look where we may throughout the South and South- 
west, we meet with evidence of the facts that their people have 
profited of the experience of the past few years, and that they now 
see the necessity for making themselves independent of the North. 
The Report now before mc everywhere urges the development of 
the vast mineral resources of the country — the establishment of 
furnaces and forges — the erection of cotton-mills — and closes with 
a proposal for the establishment of a Bureau specially charged with 
carrying these ideas into full effect, and authorized to offer pre- 
miums to those who may engage therein. Such is now the feeling 
of every Southern State, and such will certainly be its course of 
action. 

The day for all this is at band. Is Massachusetts preparing for 



51 

it? Is she making home so attractive as to lessen emigration? Is 
she not, on the contrary, under the "cheap raw material" system, 
now expelling more rapidly than ever before her native population, 
replacing it with one greatly inferior drawn from distant lands, 
and thus lowering the standard of all ? Of this there can be no 
doubt whatsoever. 

How may this be prevented in the future ? Uow may she be 
enabled to maintain her position, prospering in common with the 
South, the West, and the Centre ? To enable us to obtain the 
answer to this question let us now for a moment study the widely 
different policies of France and England. 

The one has been engaged in protecting herself, never havin"- 
warred upon the rival industries of other countries. To that end 
she has always sought, as she is now seeking, to place herself in 
the lead of the world as regards artistic development, and this 
is now as much exhibited in her iron works as it so long has been 
in the factories of Lyons and St. Etienne. Selling much skill, and 
but little raw material, she cares little how much this latter costs, 
and can, therefore, afford to permit the rest of the world to pursue 
the course of action that leads to freedom. 

The other, on the contrary, has been steadily engaged, not onlv 
in preventing elsewhere the growth of diversification in the mode's 
of employment, but in destroying it wherever it previously had 
existed. To that end she has been competing with the lowest 
priced labor of the world. Selling mere brute force, and much raw 
material, she cares greatly about the cost of this latter ; and, in the 
effort to cheapen it, she has become the promoter of slavery, whether 
black, white, or brown, in every region of the world. Her words, 
like those of Massachusetts, are words of freedom, but her policy, 
again like that of Massachusetts, is that which tends to put the 
whip in the hands of the slave-driver, whether in the bank or on 
the farm, in the factory or on the plantation, be the color of the 
slave what it may. 

The one becomes from day to day more independent of the 
tariff regulations of the world. The other becomes from hour to 
hour more dependent, and hence it is that she now seeks so anxi- 
ously to make amends for her discreditable conduct during the re- 
cent war. Hence, too, it is that she now pays so liberally all the 
men amongst ourselves, home grown and foreign, who employ them- 
selves in teaching our people the advantage to be derived from 
tearing out and exporting the soil, and carrying it thousands of 
miles over lands so filled with coal and iron ore that the match 
thereto can be found in no other country of the world. 

Of these two policies, the one tending towards elevation of the 
laborer, the other toward his depression — the one toward national 
independence, the other toward national dependence — which 
is it that has thus far been followed by Massachusetts ? Is it not 
the "cheap raw material" one — that one which tends towards sub- 
jugation of the laborer and perpetuation of the national depend- 



52 

ence ? That it is so cannot be questioned, nor can it be doubted 
that it is in this direction we must look if we desire to find the 
cause of the change now occurring in reference to the character 
of her population. Let that change go on as it now is going, 
and the day will not be distant when she will find that her day 
of power is over, and that she must be content to take her place 
among the great trading communities of the past. Holland 
was once all powerful, but the hour is now at hand when she will 
take her proper place as merely one of the provinces of the great 
Germanic Empire. 

Desiring to retain her place in the Union, Massachusetts should 
at once awake to the fact that her policy has been selfish and 
illiberal, and that it can end nowhere but in ruin. Let her then 
promptly recognize the existence of a harmony of interests among all 
the portions of the Union, and let her see that the more the southern 
people can be led to convert their cotton into yarns and cloth the 
greater must be the demand upon her for those finer goods she 
may so soon be prepared to furnish. Let her follow in the train 
of France, making demand for taste and brains instead of muscle, 
and she will then retain her native population. By that course, 
and that alone, will she be enabled to retain her influence, and to 
regain, in the commerce of the world, that position which, under 
the " cheap raw material" system, she has to so great an extent 
already lost. 

She has been long engaged in making bitter enemies, and they 
abound in nearly every quarter of the Union. Let her now, by 
manifesting a real love for freedom, a real love for the Union, 
a really national spirit, seek to convert those enemies into friends. 
Fully believing that if she fail so to do she will herself be the 
greatest suflerer, I remain 

Yours faithfully, 

HENRY C. CAREY. 
Hon. Henry Wilson. 

Philadelphia, Sept., 1867. 



LETTER ELEVENTH. 

Dear Sir : — 

Seeking to obtain financial reconstruction we must begin by an 
industrial one, it being wholly impossible tiuit we should ever 
again avail ourselves of the services of the precious metals so 
long as our commercial policy shall continue to impose upon us a 
necessity for not only exporting the whole produce of California, 
l)ut of sending with it gold-bearing bonds to the annual extent 
of almost hundreds of millions of dollars. In like manner must 
both industrial and financial reconstruction precede the political 



53 

one that is to have any, even the slightest, chance of permanence. 
The former are the bases on which the latter must rest, and therefore 
is it that I so ranch regret yonr having in your Address so wholly 
excluded both from notice. 

The industrial question having been now to some extent exa- 
mined, although not by any means exhausted, I propose next to 
ask your attention to the financial one, as follows : — 

In speaking of the currency it is usual to refer to that portion 
of it only which takes the form of circulating notes, leaving wholly 
out of view that which exists in the shape of credits to individuals 
on the books of banks, and which have been, and always must be, 
the real causes of financial crises. By a recent report now before 
me of the condition of the national banks, the amount of those 
credits was about $500,000,000, the whole of which large sura, 
with the exception of about $100,000,000 reraaining in bank vaults 
in the form of specie or legal tender notes, had been lent out and 
was then bearing interest. The difference, $400,000,000, consti- 
tuted the currency created by banks, and liable at any moment to 
contraction, at the will of bank directors. 

Again, the daily creation of currency in those forms in which 
it comes before the clearing houses, amounts, in this city and Xew 
York alone, to more than $30,000,000. 

The persons chiefly contributing to the creation of this latter 
form of currency number 1)y hundreds, and with many of them 
the daily amount counts by hundreds of thousands. In like man- 
ner some few hundreds of persons control institutions to which 
the country stands indebted for the former, and thus it is that 
we obtain what may properly be characterized as the aristocratic 
form of currency creation ; that form which seems most to please 
our legislators and our finance ministers, as, not only do they 
wholly fail to inquire into the expediency of leaving so much 
power in the hands of private individuals, but to them, precisely, 
is it that they always look for advice as to the further measures 
needed to be pursued. The shepherd thus asks of the wolf how 
he may best provide for the safety of his sheep, the wolf giving 
for answer precisely such advice as promises most to enable him to 
gobble up the flock with comfort to himself. 

For the poor sheep there is provided a currency which takes the 
tangible form of circulating notes ; that one by means of which the 
shop-keeper is enabled promptly to pay the farmer, the workman 
to pay the shop-keeper, the employer at once to pay his workraen, 
and the merchant to pay on the instant the manufacturer. This 
is the democratic form of currency, and therefore is it that it has 
been always so much vituperated by that sham-democracy which 
has clamored so loudly in behalf of hard money and British free- 
trade. It is, too, that form in which it is being now maligned 
by that portion of the republican party which so much believes in 
maintaining protection at that point precisely which seems best to 
suit the purposes of Massachusetts, as nowhere " stimulating 
domestic competition" for the purchase of those raw products she, 



54 

needs to buy, or for the sale of those finished ones she needs to 
sell. In this she is doing little more than imitating the action of 
that democracy of the past which has so frequently sought the 
prohibition of notes below ten or twenty dollars, and has so uni- 
formly ended by bringing about impoverishment of the people, 
the ruin of merchants, the stoppage of banks, the repudiation of 
State debts, the creation of shin-plasters, and the almost utter 
bankruptcy of the national treasury itself. 

The years previous to the war were, throughout the West and 
South, marked by an exaggeration of the almost ruinous state of 
things by which the crisis of '5T had been attended. The farmer, 
desiring to sell his potatoes, his fruits, his corn, was required to 
accept "store pay," or retain bis produce on his hands unsold. 
The miner, in like manner, was required to accept " orders" on 
store-keepers who fixed prices to suit themselves. The little West- 
ern farmer, desiring to mortgage his farm to obtain the means with 
which to improve it, was required to pay two or three per cent. 
]ier month, or even more. Everybody was in debt, not from want 
of property, but because of the absence of any medium of circula- 
tion by aid of which the coal operator and the farmer could be 
enabled to pay the store-keeper, and the latter to buy for cash in 
the cities with which he dealt. 

The war gave us in the "green-back" the machinery by means 
of which labor could promptly be exchanged for food and fuel, 
cloth and iron, and at once all was changed. Forthwith the 
societary circulation became rapid, and with every step of progress 
in that direction the nation acquired strength. To the tariff of 
'61, to the "greenback," and to the State in which I write, have 
we been indebted for power to make the war, and therefore, per- 
haps, it is, that the whole period of peace has been characterized 
by an incessant war upon them, each and all. 

Next in order came the establishment of a national banking 
system, in itself a good measure, but so very bad in its details 
that, if they be not corrected, it must inevitably bring about a 
separation of the trading States of the North and East from the- 
producing States of the Centre, West, and South. 

Requiring a deposit of the whole capital as security for redemp- 
tion of the circulation, it throws the banks on circulation and 
deposits for power to perform the services for which they were in- 
tended. Taxing them heavily it thus produces a necessity for 
over-trading, and for thus causing that inflation of which our 
eastern friends so much complain, but which they will be the last 
to remedy, for the reason that they themselves so largely profit by 
it. By a recent statement now before me, the joint capital of 
the national banks is shown to be . . . $418,000,000 
while the amount of their interest-bearing invest- 
ments is 1,122,000,000 

thus closely approaching three to one. 

Turn back now, I pray you, twenty years, and study the opera- 
tions of the banks in your own vicinity, those which have most 



55 

freely furnished circulation, and have most uniformly met their 
obligations. Doing this, you will find that while the loans of 
Rhode Island institutions rarely exceeded their capitals to the 
extent of a third, those of your own State rarely went beyond a 
half, or fifty per cent. In both, the banking system presented true 
pyramids, with elevation that was slight in proportion to their 
bases ; whereas, the national one gives us an inverted pyramid 
the greatest breadth of which is found in the air, and which may, 
therefore, be readily toppled over. 

Why is this so ? Because this latter is a great money monopoli/, 
for the especial benefit of the Trading States. Limiting the amount 
of circulation to $300,000,000, it by that means limits the capital 
to be applied to the great money trade — the most important of all 
trades ; and does so for the reason that outside of the cities the 
deposits are so very trifling in amount. 

A monopoly having been thus created, we may now inquire who 
they are that profit by it. Doing this, we find that the Eastern 
States, with perhaps a twelfth of the population, have had granted 
to them above a third of this monopoly power; that New York, with 
an eighth of the population, has almost a fourth ; that this State, 
with a population nearly as large as that of New England, has 
been limited to little more than an eighth ; that to Ohio, Indiana, 
and Illinois, with a population far more than twice as great as that 
of New England, there has been allowed little more than a third 
as much ; and, that for the vast region beyond the Mississippi and 
south of the Delaware and the Ohio — containing more than two- 
fifths of our population — there has been allowed just one-ninth; 
or less than is daily manufactured in New York and Philadelphia. 

Do the people of New England, my dear sir, find that they 
have too much of the machinery of circulation ? Do those of New 
York ? Do they not, on the contrary, frequently complain that 
the notes cannot be found that are needed for the work to be per- 
formed ? How then must it be with this State whose needs have 
been supplied to but little more than a third of those of the New 
England States ? How must it be with Ohio and her immediate 
neighbors ? How, above all, must it be with the almost thirty 
States and territories that with a present population /o?.</- times as 
great as that of New England, are allowed banking powers and 
privileges less than a third as great. 

The money shop is denied them. The power to create local circu- 
lation of any kind is denied them. Tressed thus to the wall, 
one southern city made an effort to provide for enabling its own 
people to make exchanges with each other, but then down came 
Congress with a tax of, I think, ten per cent, upon such local 
circulation. In this manner it is, my dear sir, that our northern 
and eastern friends, luxuriating in their full supply of banks and 
circulating notes, are furnishing the " warm and generous greet- 
ing" of which you so recently have spoken. 

As a consequence of this it is, that New York and New 
England are now enabled to lend circulating notes on the best, 



56 

security, at the south, at two per cent, per month ; and that 
southern people now pay, rep:ularly, three, four, five, and even, 
as it has been stated, ten per cent, per month, for tlie use of 
little pieces of paper issued by northern and eastern banks for the 
private profit of their stockholders. Such may be the road to 
permanent reconstruction, but if it is, I, for one, must say, that it 
does not so to my mind present itself. Bad as is all this, we are 
promised that it shall, for the unfortunate people outside of the 
Trading States, yet be worse. Up to this time they have had the 
advantage of some portion of the "green-back" circulation, but 
of that they are, as our Finance Minister insists, to be gradually, 
but certainly deprived. The circulation, as he gravely assures 
us, is quite too large, and contraction is to be, as he so long has 
desired that we should understand it must be, the order of the 
day. This the West resists, and moves the House that further 
strengthening of the money monopoly of the trading States, Xew 
York and New England, be dispensed with. The vote being 
taken, but sixty-five votes are found adverse to the motion, and 
of these there are from 

New England and New York .... 38 
All other States . . . ^ . . 2T 

Total G5 

The majority, favorable to the doctrine of equal rights among 
the States, numbers ....... 95 

Of these there are from 

New England and New York . . . .13 

All others 82 

The vote for the resolution outside of the Trading States is there- 
fore more than three to one. Were the question now to be taken, 
it is doubtful if even a single adverse vote could be found south 
or west of those States. Outside of them the treasury system 
has scarcely a friend. Why should it have ? In no country of the 
world is the supply of currency so small when compared with the 
commerce for whose service it is needed. 
Of the " green-backs" the amount at present ex- 
isting is but $370,000,000 

Of national bank-notes there are less than . . 300,000,000 



$670,000,000 



Of these the quantity always in bank, or in the 
treasury, and thus out of circulation, is never 
less than . , 170,000,000 



Leaving but .. . . $500,000,000 
for the service of nearly 40,000,000, scattered over a whole conti- 
nent. Of this the little New England has, legal tenders included, 
more than a fourth, leaving the balance for tlie service of the less 



5T 

fortunate portion of our population. One of two things is certain : 
either New England has thrice too much, or the rest of the country 
much too little. The former does not think she has more than 
she needs, and will relinquish none. Neither will she agree to 
any increase elsewhere. On the contrary her people, in and out 
of Congress, lecture the unfortunates who have not the happiness 
of residing east of the Hudson, after the following fashion : — 

" If the people of this country could be made to see that the present 
expanded currency is not a blessing but a curse ; that it is one of the most 
unequal and burdensome of taxes ; that it gives undue value to capital as 
compared with labor, tliiTs pressing most heavily on the working classes, 
tending to make the rich richer and the poor poorer; that it stimulates 
speculation (which is gambling under a less oflensive name) by turning 
the most active and ambitious men from the occupations of production to 
those of exchange, from mechanics and farmers into brokers and middle- 
men ; that it drives men from the country into the cities, in the hope of 
sudden wealth, and because it is thought more respectable to buy and to 
sell than to labor with the hands ; that it subverts all true notions of value 
and produces such constant fluctuations as to make honest industry inse- 
cure of its rewards ; if the people can be made to see all these evils, and 
will open their eyes to the enervating, demoralizing consequences, tliey 
will patiently and cheerfully submit to the temporary hardships which are 
involved in reducing this redundant currency to its normal proportions ; 
they will by all their influence sti-engthen the hands of Congress and of the 
Secretary of the Treasury, that the day may be hastened when this country 
shall again conduct its domestic and foreign dealings on the basis of the 
only currency which can render trade secure — that of the precious metals." 

The author of this, ray dear sir, is one of your own constitu- 
ents — one of those who, in common with the rest of the New 
England people, have secured for themselves a fixed and certain 
allowance of currency more than three times greater than is, by 
law, now allowed to nearly thirty States and Territories, with a 
population five times greater, and standing greatly more in need 
of tangible machinery of circulation. Do you, however, find in it 
any suggestion that the monopoly now existing shall be in any 
manner modified; that the power already obtained over the cur- 
rency shall in any way be lessened ? Not in the least. It says 
to the Centre, the South, and the West, surrender a part of the 
little we have left you, and let our monopoly be rendered more 
complete, and more than this it does not say. 

The day, however, for all this is past. Massachusetts must de- 
termine voluntarily to abandon the idea of manufacturing, money, 
and trading monopolies, or she will raise such a storm in the 
Centre, the West, and the South, as will compel her so to do. Fully 
believing this, and as much believing it to be the duty of Pennsyl- 
vania, as Keystone and Guardian of the Union to take the lead in 
a movement to that end, I remain, 

Yours very truly, 

HENRY C. CAREY. 
Hon. H. Wilson. 

Philadelphia, September, 1867. 



58 



LETTER TWELFTH.; 

Dear Sir : — 

The Fort Wayne decree of Secretary McCulloch, likely to prove 
of far more enduring importance than the Berlin and Milan de- 
crees of the Emperor Napoleon, is now nearly two years old. As 
it stands it constitutes the great financial blunder of the age, hav- 
ing already, by the paralysis of which it has been the cause, cost 
the country more than the whole amount of the national debt. 
Let its policy be persevered in and it will constitute the greatest 
in history, for it ivill have cost the Union its existence. 

Gladly hailed by the capitalists and bankers of your State, and 
by the gentlemen who represent them in Congress, contraction has, 
from that day to the present, been the burden of their song. 
What, however, was it that they desired to see contracted ? Any 
portion of the $100,000,000 of circulation that they had so 
promptly appropriated to their own especial use? Any part of 
the $170,000,000 appropriated by the combined Trading States, 
New York and New England ? Certainly not. That for whose 
contraction they have since so loudly clamored constituted nearly 
the whole machinery of exchange throughout the Producing States 
with their present population of 30,000,000, likely very soon to 
be 50,000,000. For these, their unfortunate subjects, there was to 
be allowed in all the future the fixed amount of $130,000,000, 
or, even now, hni four dollars per head ; the compact New England, 
whose need, per head, for some tangible medium of circulation, 
was not one-half as great, meanwhile luxuriating in a circulation 
of thirty dollars per head, and finding even that not to be at all 
in excess of its actual wants. 

On a former occasion, as you may recollect, it was shown that 
your State, in its anxiety for commercial reform, had magnani- 
mously and liberally offered to the West, in exchange for what it 
claimed to need, a surrender of the rights of its late allies of the 
IVJining Centre. What then was done has now been repeated 
here, her anxiety for financial reform having led her to insist upon 
a total surrender of the rights of the Producing States, and the 
member for Lynn having uniformly taken the lead in insisting that 
such surrender should be made. A monopoly of the money j)ower 
had been obtained, and it was to be maintained even at the cost of 
reducing tlie whole people of the Producing States, loyal or dis- 
loyal, to the condition here described as now existing in the 
Mormon State : — 



59 

"Wheat is the usual legal tender of the country. Horses, harness, 
vehicles, cattle, and hay are cash ; eggs, butter, pistols, knives, stockings, 
and whiskey are change ; pumpkins, potatoes, sorghum molasses, and 
calves are ' shinplasters,' which are taken at a discount, and with which 
the Saints delight to pay their debts (if it is ever a delight to pay debts). 
Business in this community, with tliis currency, is a very curious and 
amusing pastime. A peddler, for instance, could take out his goods in a 
carpet-bag, but would need a ' bull' train to freight back his money. I 
knew a man who refused an ofler to work in the country at fifty dollars 
a month because he would need a forty-hundred wagon and four yoke of 
oxen to haul his week's wages to the whiskey-shop, theatre, &c., on Satur- 
day evening. * * * When a man once lays out his money in any kiud 
of property, it is next to impossible to reconvert it into money. There is 
many a man here who, when he first came into the valley, had no inten- 
tion of remaining but a short time, but soon got so involved that he could 
never get away withoirt making heavy pecuniary sacrifices. Property is 
a Proteus, wliich you must continue to grip firmly, notwithstanding his 
slippery changes, until you have him in his true sliape. Kow you have 
him as a fine horse and sadddle ; presto, he is only sixty gallons of sor- 
ghum molasses ; now he changes into two cows and a calf, and before you 
have time to tliink he is transformed into fifteen cords of wood up in the 
mountain canon ; next he becomes a yoke of oxen ; then a ' shutler' wagon ; 
ha! is he about to slip from you at last in the form of bad debts ?" 

Place, I pray you, the people of Massachusetts in this position, 
and determine for yourself how they would think and act. Study 
the picture, for it is a tolerably accurate one of that which now 
prevails throughout a large portion of the Centre, South, and West. 

To the hour at which was issued that most unfortunate and ill- 
advised decree there had still remained in existence most of that 
faith in the future by means of which we had been carried safely 
through the war. From that hour it began to pass away, and 
with each successive day there has been seen an increased desire 
to centralize in the trading cities the disposable capital of the 
country — hoarding with banks and bankers, trust and deposit com- 
panies, at small interest, the means that otherwise would have been 
employed in opening mines, building furnaces, mills, or ships, 
mining coal, or making cloth. From that unfortunate hour works 
of national importance were abandoned, mills and factories com- 
menced to contract their operations, coal tended more and more 
to become a drug in the market, and the demand for labor to 
decline. From that hour money tended to accumulate in all those 
cities, and to become more and more inaccessible to men by which 
it could be made to create demand for human service. From that 
hour the poor tended to become poorer and the rich to become 
richer, till, as now, the Boston capitalist obtains twice the war rate 
of interest, the little "Western farmer, as is shown by the following 
passage from a money article of the day on which I write, mean- 
while gradually returning to the enormous rates of the period 
before the war : — 

" At the West rates of interest are, as usual, far in advance of our home 
figures. An agencij has been established in Boston, within a very short time, 
for negotiating first-class Western mortgages at ten per centum. In Cincinnati 



60 

tbe bank depositors have to pay from eight to nine per centum, and the 
lowest street rate is ten per cent. Tvro per cent, a month is not a very 
nncommon figure out West. In the southwest the rates of interest would 
appear enormous to eveu the eyes of tlie sharpest Eastern note-shaver. 
In Memphis three to Jive per centum a month are common jigares." — Press. 

Such being: the state of things in the green wood, what will it 
be in the dry? When the Secretary made his speech denunciatory 
of the best currency the people had ever had, the legal-tenders 

stood at $400,000,000 

On the first of last mouth we had . . . 369,164,344 



Reduction in 22 months ..... $30,835,156 

There are yet, therefore, to be withdrawn nearly $370,000,000. 
When that shall have been done may we not hope to hear of 
agencies in the Eastern States for negotiating first-class Western 
mortgages at more than double the rate above described ? That 
we shall do so, I feel quite assured. 

The money monopoly already here established is, I am well 
satisfied, the worst at present in existence iu any country claiming 
to rank as civilized; yet is it now seriously proposed to make it 
from day to day more complete, and thus to establish a subjection 
to the money power of our whole people, black and white, without 
a parallel in financial history. 

We are, however, gravely told that it is in this manner alone 
that we are to be enabled to return to the use of the precious 
metals. What has been our progress in that direction, in two 
years of paralysis throughout which the Secretary has been unre- 
mitting in his efforts at contraction, will be seen on an examination 
of the following figures, representing millions of dollars : — 

Oct. lS(i5. Oct. 1S66. July, 1867. 
Banking capital . . .393 403 418 

Interest-bearing investments . 1,020 1,060 1,122 

Twenty-five millions have thus been added to the base, a hun- 
dred meanwhile to the superstructure, and the edifice having 
more and more assumed the form of an inverted pyramid that 
may at any moment be toppled over. So must it continue to 
do for every hour of the future in which the McCulloch-Massa- 
chusetts system shall continue to be maintained, the direct effect 
of paralysis being that of giving increased power to banks and 
liankers, and all others of the class which controls and regulates 
that portion of the currency which has been designated as aristo- 
cratic, and from which our crises always have come and must 
always come. 

To the $100,000,000 of the incorporated banks may now, as I 
doubt not, be added half as much, additional to the quantity 
that had been usually controlled by individuals, and by institutions 
other than banks, in those war days when the public policy tended 
to favor those who had money to borrow and labor to sell, instead 



61 

of, as now, favoring those who have money to sell and labor to bny.' 
That $150,000,000, centralized in the few trading cities, does more 
to produce that which it is the fashion of the day to call inflation 
than would be done hy five times the amount of greenbacks scattered 
among the 30,000,000 of people inhabiting the Producing States. 

By its help it is that money is made cheap to the British iron- 
master who places his products in the public stores, while made 
so dear to the coal-miner that he becomes bankrupt by reason of 
inability to borrow at two per cent, per month. By its means the 
country is flooded with foreign iron requiring for its payment 
$2,000,000 per month of California gold. By its means our people 
are being from hour to hour more compelled to look to the large 
cities as the only places at which exchanges can be made, and the 
more they are so compelled the higher becomes the taxation of 
the Producing States for maintenance of owners of New York and 
Boston hotels and houses. The higher that taxation, and the 
poorer the people of the Producing States, the greater becomes 
the ability of owners of city property to live abroad, and thus to 
swell the amount of travelling bills that have already reached so 
high a figure as to require for their payment a sum equal to nearly 
the whole amount of the exports of the loyal States, leaving little 
beyond gold and bonds with which to pay for foreign merchandise 
consumed at home. Study carefully these facts, my dear sir, and 
you will find little difSculty in understanding how it is that the 
Massachusetts policy is now compelling us to go abroad to borrow 
money, on the security of the State, at almost thrice the rate of, 
interest paid by Britain. 

According to Mirabeau, "capitals are necessities, but," as he 
added, "when the head grows too large the body becomes apo- 
plectic and wastes away." — British free-trade, and Massachusetts 
determination to resist any measure tending to promote "domestic 
competition," have combined to make of the little territory east of 
the Hudson a head so large that we are threatened with precisely 
the state of things above described. The " waste" is now going 
on, and, unless the system be resisted, must so increase as to pro- 
duce financial, moral, and political death ; that, too, despite all 
your efforts at political reconstruction. 

Prices, however, it is insisted, must be reduced. So were we 
told two years since by men who did not trouble themselves to 
study the fact that years were needed for enabling us to restore 
our stock of hogs and cattle, cows and horses, even to the point at 
which it had stood before the war. So are we now told by others 
who do not care to see that constant exhaustion of the soil of the 
West and Northwest has made our supplies of food more preca- 
rious than they had ever been before.* That some prices must 

* The average quantity of certain articles that passed the New York 
canals in the three seasons 1848, 1849, and 1850, closely following the 



62 

have been reduced is shown by statements of the Tribune in refer- 
ence to the number of persons now wholly unemployed in New 
York city. That others have been reduced you may find on visit- 
ing our mining region, where men who are not wholly unemployed 
are compelled to accept half war prices in return for labor, while 
paying almost war prices for the food consumed by their families 
and themselves. Petroleum has become so complete a drug that 
most of the wells have been abandoned, and the men who therein 
had been used to laljor have been dismissed. Cotton, by reason 
of the closing of our mills, has been piled up in Liverpool until 
it, too, threatens to become as great a drug as it had been in the 
good old British free-trade times when British manufacturers could 
pick and choose at five pence. Contraciion is, throughout the 
Producing States, putting down the price of American labor and 
its products, while putting up the prices of money, cotton cloth, 
and various other things that Massachusetts has to sell, yet has 
the process but begun. It is carrying into full effect the idea that, 
so far as I am informed, was first broached in the Newport Con- 
vention twenty years since, that "domestic competition" must be 
prevented, whether for purchase of raw materials or sale of finished 
goods; and with the further addition, that there is not in the 
future to be allowed, throughout the Producing States, any com- 
petition with the trading Slates for the sale of money. The 
monopoly of that important trade is now in the hands of these 
latter; and that it is to be rigorously maintained has been proved 
by Massachusetts action throughout the last Congress, 

The tax on cotton being specific, the lower the price the more 
burthensorae does it become. The McCulloch- Massachusetts 
policy has largely reduced its price while doubling the rate of 
interest paid by its producer, yet is the tax collected. Such 
being one of the "warm and generous greetings" extended to our 
erring brethren of the South, the question now arises as to how 
many such will be required for producing resistance in a form 
that, when it shall come, as come it must, will result in perfect 
achievement of the object. 

Taxes are heavy. Collected in the Trading States, they are 
finally paid in those Producing States to which it is now proposed 
to allow a circulation o^ four dollars per head, the people of New 
England meanwhile jealously retaining their thirty dollars per 

passage of the pro-slavery tariff of 1S4G, and iu the first half of the present 
aud the past seasons, is as follows : — 

Seasons of 1S4S, Half seasons, Mar 1 to July 
'49, ';J0. 31, 1S6.5, '6(j, '67. 

Flour, barrels . . . 3,224,000 148,000 

Wheat, bushels . . . 3,126,000 1,500,000 

Corn, "... 3,700,000 4,300,000 

Pork, barrels . . . 69,000 5,000 

Beef, " ... 87,000 2,400 

In that time the population, chiefly occupied in tearing out and exporting 

the soil, must have more than quintupled. 



63 

head, and lending out the surplus to the Centre, South, and West 
at prices varying, as we see, between ten and fifty per cent, per 
annum. Moving in this direction, how long, ray dear sir, will it 
be before we shall attain a perfect reconstruction? Shall we not 
sooner reach a new rebellion ? I think we shall. 

Throughout the war we were steadily congratulated on the facts, 

that the certificates of public debt were nearly all held at home 

that the number of small bond-holders was immense — tJiat we had 
thus an important security for punctual payment of the interest. 
Since the peace all this, however, has been changed, the great 
object now sought by the Treasury, and by our Massachusetts 
friends, to be attained, being low prices for human service and for 
all the rude products of mining and agricultural labor. The 
lower those prices the greater becomes the necessity for selling the 
little fifty dollar bond in which had been invested the savings of a 
year, and the greater the centralization of certificates of public 
debt in tlie hands of Eastern and European capitalists. Going 
ahead under the McCulloch-Massachusetts system, the time must 
soon arrive when nine-tenths, or more, of this interest will need to 
be paid north and east of Pennsylvania, in the Trading States and 
in Europe ; the Producing States meanwhile paying nearly all the 
public taxes, and thereto adding two, three, if not even five, per 
cent, per month, for the use of circulating notes so liberally 
allowed to our New England friends. Should this system be 
maintained, might it not lead to non-payment of the interest ? I 
think it would. 

On occasion of the dedication of the Gettysburg Cemetery, Mr. 
Lincoln declared that this was "a government of the people, by 
the people, and for the people;" and in this most of my fellow- 
citizens of the Centre are in full accord with him. They do not 
believe that it is a government of the Centre, the West, and the 
South, by the North and East, and for the special benefit of the 
trading States. Well will it be for the people of these latter if 
they can at an early date arrive at the conclusion that Mr. Lincoln 
had been right and that their whole policy, directly opposed 
thereto as it has been, had been a most unwise one ! 

Mr. McCulloch's policy has been one great mistake, and it has 
proved a most costly failure. Seeing, that the law had created a 
monopoly of the money power ; that while it limited the base of 
the edifice it set no limit to the elevation ; that with every hour 
it was becoming more top-heavy and more in danger of being 
toppled over ; seeing all this, I say, he should have asked of 
Congress an extension to the people of the Producing States of 
all those powers M'hich had been so fully granted to the trading 
ones, and he should have then encouraged the creation of local 
institutions for the service of the 30,000,000 of people who are 
now so unjustly, and unconstitutionally, made mere hewers of 
wood and drawers of water for their brethren of the northeast. 
So doing, he would have prevented that accumulation of capital 
in trading centres which has been so freely used for speculation in 



61 

commodities of first necessity, to the heavy loss of those by whom 
they were needed. So doing, he would have been aiding in the 
construction of mills and furnaces, and in the cheapening of cloth 
and iron. So doing, he would have made a home market for the 
hundreds of millions of bonds that have already gone to Europe, 
each new bank becoming a holder thereof to the whole extent of 
its circulation. So doing, he would have tied the States together, 
and would, have been bringing about the "more perfect union" 
that we had all so much desired. Not having so done, he has 
brought about a state of things so purely sectional that it must, 
and should, provoke resistance. 

At this moment circulating notes are very scarce in Eastern 
cities. Why ? Because of the help demanded by their poor 
clients of the South and West for movement of their very little 
crops. Why, however, cannot the Producing States help them- 
selves ? Why not, like Massachusetts, make such notes ? Why, 
bone and sinew of the country, and ultimate payers of nearly all 
the taxes, as they certainly are, should they be held in such com- 
plete dependence? Because they are being made mere puppets 
whose strings are to be pulled at their master's pleasure! To 
make the thing complete, it is now required only, that the "green- 
back" be annihilated, and that all banks south and west of the 
Hudson be required, as it is meant they shall be, to place in 
New York City lawful money with which to redeem their notes. 
Thereafter, the wolves may, at their entire convenience, devour 
the poor and unfortunate sheep, as it is proposed they shall do. 

More than any other State is Pennsylvania representative of 
the 30,000,000 of the Producing States : more than with any 
other, therefore, is it for her, in the existing state of things, to 
study her rights and her duties. So doing, she finds that to her- 
self she owes it to insist that her citizens be placed on a precise 
equality with those of the Eastern States. To the Centre gener- 
ally, to the South, Southwest, and West, she owes it to demand 
for them now, as in all the past she has done, the enjoyment of 
all the rights and privileges she claims for her people and herself. 
To the whole Union she owes it to demand the abandonment of 
that monopoly system which now threatens to defeat all efforts at 
reconstruction. To the world at large she owes it to interpose 
in behalf of the impoverished Southern people, and more especially 
of those colored men who are now threatened with a money tyranny 
more injurious in its effects than the slavery from which they have 
but now been rescued. 

Such are her duties. That they will be performed I feel well 
assured. Fully believing that you, were you one of her citizens, 
would desire that they should be so, I remain 

Yours, very truly, 

HENRY C. CAREY. 
Hon. H. Wilson. 
Philadelpuia, September, 18G7. 



65 



LETTER THIRTEENTH— AND LAST. 

Dear Sir : — 

England believes in buying: raw materials at low prices and 
selling finished goods at high ones. It is her one Article of 
Faith; that one her belief in which has brought about a necessity 
for reconstruction at home and abroad, in England herself and all 
her dependencies. France, under the imperial regime, has been 
following in the British footsteps, with daily growing necessity for 
a reconstruction the day for which cannot be now remote. Both 
are declining in influence, and thus are furnishing new evidence 
of the fleeting character of trading power. Our trading States 
take Britain for their model, and so rapid is their progress in the 
false direction that, while still dreaming o^ reconstruction, they are 
already face to face with a dissolution which, if allowed to come 
to pass, will prove a permanent one. 

Germany and Russia, producing States, desire that raw mate- 
rials should be high in price and finished commodities cheap. So 
do our Centre, South, and West. Natural allies of the two ad- 
vancing countries of Europe, our fast friends throughout the war, 
these latter may safely leave the Trading States to their alliance 
with those declining ones which so gladly gave their countenance 
to the rebellion, and which now so clearly see that maintenance 
of their own political power is dependent wholly upon preventing 
permanent reconstruction here. 

The tendencies of the two portions of the Union are thus, as 
we see, in opposite directions, and most especially must this be so 
now that the war has on one side removed the obstacle that had 
prevented combined action, while on the other it has created 
trading, manufacturing, and moneyed monopolies of fearful power. 
Can they in any manner be brought to act together ? Will the 
Trading States cordially ally themselves with the Producing ones 
for the gradual, but certain, abolition of these monopolies ? Will 
they agree upon a system that shall promote, and not prohibit, 
"domestic competition"? Upon the answer to be given to these 
questions now hangs the determination as to whether we are, or 
are not, to have a permanent political reconstruction embracing 
the whole of the existing States. 

Prior to the Chicago Convention of 18G0 it had, as I have 
already said, been determined by the Trading States that the plat- 
form, like that of 1856, should be confined to politics alone, leav- 
ing wholly unexpressed the desires of the people in reference to 
national questions of high importance. It was a British free-trade, 
5 



66 

plot, well arranged, but the defeat it met was thorough beyond 
example. From that time to the present the Republican party, 
in imitation of the old Democratic one, has been playing fast and 
loose with the question then decided, advocating British free-trade 
in one State and American free-trade in another; and so, as I just 
now read, it is proposed that it shall continue to do in all the 
future. The arrangements for all tliis are, as I doubt not, very 
perfect, hnt the scheme ic ill fail. Of that you may rest assured. 
The next convention, like that of 18G0, will find itself compelled 
either to indorse or repudiate the monopolies of which I have 
spoken ; to be for or against the doctrine of equal rights ; to be 
American or English ; to be for or against that industrial inde- 
pendence without which any attempt at financial or political re- 
construction is a useless waste of time and words. In 1860, 
men who had to that time been strenuous advocates of British 
free-trade and industrial dependence, found themselves compelled 
to join in the tumultuous demonstrations of joy at the reading of 
that resolution by which the party placed itself on the side of 
American independence. So, I feel confident, will it be again. 
Powerful as are the Trading States, there will, on that occasion, 
be found not even a single man so poor as to do reverence to 
the monopolies that the war has given us, or has so much 
strengthened. 

Such is my firm belief, yet it may prove that the Trading States 
exercise a greater amount of influence than I anticipate, and 
that the advocates of high freights, dear money, dear cloth, and 
cheap raw materials, whether " wool or hemp, coal or iron," suc- 
ceed in obtaining an indorsement of the policy of Massachusetts 
capitalists. Admitting now, for a moment, that such should 
be the case, what, in your opinion, would be the course of the 
people of your State were they to be at once transferred to the 
hills and valleys of Pennsylvania ? Might they not, do you think, 
be disposed to invite a Conference of tlie Producing States? Might 
they not, in that invitation, show that the Trading States had had 
but one end in view, that of compelling the producing ones to 
make all their exchanges through the ports of New York and 
Boston, and through the mills of Old and New England ? Might 
they not show that to the trading monopoly which had so long 
existed there had now been added a monopoly of the money 
power by means of which its holders had already become enabled 
to tax, almost at discretion, the people of the Producing States ? 
Might they not show that every effort was now being made so to 
strengthen that monopoly as to render it tenfold more oppressive 
than as yet it had become ? Might they not show that while the 
real wealth and strength of the country was to be found in the 
Producing States, their agents, the merely Trading States, had 
now become so confident as to have ventured to defy resistance? 
That done, might they not proceed to say — 

That throughout a large portion of the Producing States, but 



r,Y 

most especially in the South and Southwest, there existed a wealth 
of soil, and a mineral wealth, without parallel in the world : 

That what was needed for the development of both was 
population : 

That immigration had always grown with great rapidity in 
periods of protection, while it had always decreased in those of 
British free trade : 

That to enable the people of Europe readily to reach the rich 
lands of the Centre, the South, and the West, it was indispensable 
that their owners should themselves be enabled freely to communi- 
cate with the whole outside world through the various ports that 
fringe the coast from the Delaware to the Rio Grande : 

That to enable northern people to pass from the now exhausted 
lands of the West and Xorthwest, and thus obtain power to par- 
ticipate with their owners in the development of rich Southern 
lands, it was indispensable that roads should be made leading 
North and South, and not, as now, exclusively East and West : 

That to the end that such roads might be made, and such ports 
be used, it was indispensable that measures should be adopted for 
enabling Southern and Western men to mine their own coal, smelt 
their own ores, and make their own cloth : 

That the one great object always held in view by the Trading 
States had been that of preventing, throughout the South and 
West, the application of capital and labor to the work of manufac- 
ture, and thus preventing any growth of "domestic competition" 
for either the purchase of raw materials or the sale of cloth : 

That to the trading and manufacturing monopolies which had 
so long existed there had now been added a money monopoly of 
fearful power; one whose continued maintenance could have no 
result other than that of making the people of the Producing 
States mere hewers of wood and drawers of water for those who 
had so long been employed in forcing themselves into the position 
of being their exclusive agents : 

That the real power was in their own hands, and that it rested 
wholly with themselves to determine whether their exchanges 
should in future be performed in the cities north of the Delaware 
or south of it : 

That the time had arrived for exercise of that power, and that 
by the adoption of proper measures they could, if they would, com- 
pel the transfer to the South and West of a large portion of the 
machinery now in use in the Trading States : 

That to the end of arriving at some clear understanding by 
means of which the Producing States should be enabled to estab- 
lish an equality of rights; to secure to themselves free communi- 
cation with the outer world; to obtain for themselves a proper 
supply of the macliinery of circulation ; to be freed from the 
present ruinous charges for the use of circulating notes ; to pro- 
ceed peacefully and (juietly in the development of the vast res<;urces 
placed by nature within their reach ; to obtain that real freedom 



68 

of trade which can exist in no country that exports raw produce; 
to establish that diversity in the demand for human service by 
means of whicli, alone, can tlie freedman be enabled to profit by 
the act of emancipation ; and, finally, to secure that the Union, 
when reconstructed, shall be permanent ; this conference had been 
i nvited. 

Having read the above, allow me, once again, to ask that 
you place yourself and your constituents in the position of the 
])eople of Pennsylvania, feeling yourselves the proper representa- 
tives of great national interests whose development in other coun- 
tries has brought wealth to the people and power to the State. 
Study then with them the history of our past legislation, and see 
how little creditable have been the influences, foreign and domestic, 
that have prevented such development. Study with them the 
consequences, and see that our supplies of food become more and 
more irregular as we become more dejjendent on other nations for 
cloth and iron. Study with them our monetary system, and see 
that nearly all the power that the States at large have lost has 
now become closely monopolized and mainly held in a few 
trading States. Study with them the results that even thus far 
have been realized, and then see with them that the strengthening 
of that monopoly, now so strongly urged, must result in grinding 
to powder the whole people of the Centre, the South, and the 
West. Study all these things, and then, I pray you, answer to 
yourself the question as to whether you would or would not, under 
such circumstances, hold that you would be failing in your duty 
to them, to the nation, and to the cause of civilization, if you did 
not strongly urge the adoption of the course of action that has 
above been indicated. That you would I feel well assured. 

Will it, you may ask, be adopted ? If so, will Pennsylvania 
find herself among allies or enemies ? 

To the first I confidently answer in the affirmative. To the 
second, that, unlike Massachusetts, Pennsylvania has no enemies. 

Penn and his successors had a great mission on this Western 
Continent which, thus far, has been well performed. First to pro- 
vide by legislative action for emancipation of the colored race, they 
simultaneously with New York emancipated the weaker sex from 
the Common Law tyranny in regard to rights to property. First to 
recognize the perfect equality of the States, large and small, they, in 
effect, made our present Union. Occupying a frontier State, and 
the only one liable to invasion, they stood, materially and politi- 
cally, the bulwark of that Union throughout the late rebellion. — 
The crowning act yet remains to be performed, in now interpos- 
ing between the Trading and Producing States for the purpose of 
bringing about that harmony of action without which the Union 
neither can, nor ovijht to he, maintained ; and for the further pur- 
pose of making of the Declaration of Independence something 
more than the mere form of words that it has thus far been. For 
such interposition their State stands fully qualified, her record 



69 

being as bright and as free from any taint of selfishness as 
that of any other coramnnity whose history has been recorded. 
She has not now, nor lias she ever had, any interest that is not 
common to twenty other States. Never has she abandoned her 
friends.* Never has she made demand for anything to be enjoyed 
by herself alone. In regard to the production of iron she stands 
DOW as far above all other States as does your State in regard to 
cottons, yet does she insist on that perfect protection which must 
aid in development of the wonderful mineral resources of the 
country from the Lakes to the Gulf, and from the Atlantic to t4w 
Pacific. For herself, therefore, she asks nothing. For the Union 
she asks, and will insist upon, that harmony and peace which must 
result from proper appreciation of the fact, that while it is quite 
in the power of the Producing States to change their places of 
exchange and their agents, it is not in the power of the Trading 
States to find elsewhere such patient milch-cows as they have 
thus far proved themselves to be. To make the demand therefor 
has now become her duty, and so great has become t!ie dissatis- 
faction — I might use a stronger word — at the e.Ktreme selfishness 
of eastern friends, that were the question of its performance now 
submitted to a vote, it would command the assent of four out of 
five of the whole people of the State. 

Might not, you may ask, a movement like that I have indicated, 
lead to another civil war ? Certainly not. To the great natural 
resources of the hill and mountain country was the South indebted 
for power to maintain the recent war. To the more developed 
resources of the mountain country of the North have we stood in- 
debted for power to extinguish the rebellion. When the whole 
mountain region shall be of one mind it will be found that the 
people of the flats can make no war. As Pennsylvania has gone 
so has always gone the Union. As she now goes, so will it go. 
She does now go for abolition of monopolies. Northern, Eastern, 
and British, and it may be well for our Republican friends of the 
trading States to know that the days of their existence have been 
already counted, and have been found to be very few in number. 

Ten years since, after the occurrence of the great financial crisis 

[From, the ''Globe," Feb. 24, 1855.] 

* " The manufacturers of Ma.ssachu.setts were willing to assent to a re- 
duction of manufactured articles for the reason that it was accompanied hij 
a still greater reduction on raw material. * * * * 

"The way to break down protection is to strike at it in detail ; by de- 
taching from its support interests that are willing to be detached." — Jlr. 
Baxks, of Massachusetts. 

" When, sir, the effort was made to detach the Pennsylvania representa- 
tives by appeals to their peculiar interests, what did you see ? When we 
were told that ample protection would be given to the iron interest if we 
would strike a fatal blow at the interests of other States, the united dele- 
gation from Pennsylvania, Whigs and Democrats, answered: No!" — Mr. 
Howe, of Pennsylvania. 



of 185t, but in advance of his first message, I addressed Mr. 
Buchanan a private letter in which he was told that persistence in 
the policy of his predecessor would result in his own ruin and that 
of his party, and in dissolution of the Union. Of course he did 
not believe of this even a single word, it being a rule with our 
public men never to believe in anything until too late. That letter 
is, however, a tolerable history of what has since occurred. Kow, 
my dear sir, I do the same by you. You, as I fear, will do as Mr. 
Buchanan did, not believing what has been predicted. "Within 
the next decade those predictions will have become history, and 
your fellow-citizens may then find reason to regret that, like Mr. 
Buchanan, you had not believed, until too late. 

Begging you to excuse my repeated trespasses on your kind 
attention, I remain, with great regard, 

Yours truly, 

HENRY C. CAREY. 
Hon. H. Wilson. 

Philadelphia, September 30, 1867. 



POSTSCRIPT. 



Since writing the above I find the following in the Neiv York 
Times : — 

THE REPUBLICAN PARTY — ITS GREATEST PERIL. 

The warning of the Maine election came not a moment too soon for the 
welfare of the Republican party. The West furnishes abundant indica- 
tions of the danger it encounters as a consequence of tlie determination of 
cliques and factions to foist upon it issues quite foreign to the recognized 
objects of its organization. Senator <Trinies s vigorous protest against tlie 
jtttempt to make the prohibitory tariff a test of party orthodoxy, receives 
the indorsement of tlie leading Republicans of his State, (ren. Baker, 
Adjutant-General, and one of its most influential men, writes " that if the 
tarilf lobby succeed in interpolating into the creed of the Republican party 
a prohibitory tariff plank, and making that the issue, the Republican party 
of the Northwest will be smashed to atoms." Strong as the statement is, 
we are persuaded that it does not transcend the truth. Throughout the 
Northwest the Itepublican press is unanimous in its denunciation of the 
combinations which try to manipulate the action of Congress on the tariff 
question ; admitting the necessity of liigh duties in existing circumstances, 
bnt resisting any assertion of the prohibitory principle iu the interest of 
classes. 

History is constantly repeating itself. The above is but a new 
edition of the advice given to the party in 18G0, and given by all 
the British free trade journals, the Times included. How it was 
then answered by the Convention we uU now know, and my 



11 

readers have been informed as to t1ic reasons why the answer had 
been such as secured the election of Mr. Lincoln. 

For a present answer 1 beg to offer the following paraG:raphs 
from the London correspondence of the same JVeio York Times, 
just two days later in date : — 

"The correi5pondents of English papers give melancholy accounts of dull 
business in commerce and manufactures in America ; but the remedy for 
this is so easy, as pointed out in a Times leader, that it is only necessary 
to call an extra session of Congress and adopt it. You have only to remove 
all restrictions upon Free Trade. Repeal all duties upon imports, and 
every ship-yard would be alive with workers, every factory in full opera- 
tion, and the whole country prosperous and happy. But the trouble is 
that nobody in America knows anything about political economy. Under 
the actual tariff, it is said that Anjerican manufacturers are undersold by 
those of England and Germany — a Free Trade would bring all right again. 
It happens, however, that England, with Free Trade, is scarcely building 
any ships, and that she is in serious danger from Continental competition. 
How is this muddle to be disposed of? With PVee Trade, half the labor- 
ing population in England lives upon wages just above the point of starva- 
tion, with no resource in sickness or old age but the workhouse, and Ire- 
land is iu a state of chronic poverty and discontent. With Free Trade, 
there is a perpetual war between capital and labor, and the enormous 
burden of pauperism is increasing. Americans may be ignorant of political 
economy, but I cannot see that the English are overburdened with wisdom, 
or that the practical results of their system are of a very enticing character. 
The workingmen of England believe in protection, and the English colo- 
nies practice it, to the great annoyance of the theorists at home. 

"After all. Free Trade is a proved impossibility. Parliament is con- 
stantly interfering with what, according to our philosophers, should regu- 
late itself. The Poor Law system is itself a protective measure. So are 
all the laws limiting the hours and ages, and regulating the conditions of 
labor. We have acts of Parliament forbidding the employment of women 
in coal-pits, where, a few years ago, they worked naked like brute beasts ; 
acts forbidding the employment in factories of children of twelve years ; 
and, during the last session, laws have been passed for the protection of 
children in the numerous trades and in the agricultural gangs which would 
disgrace Dahomey. There is need of abundance more of such interference. 
In the black country, north of Birmingham, there is a large population 
engaged in making nails by hand labor — especially horse-shoe nails. On 
an average, three females are employed in this work to one male. I won- 
der if, in all America, there is one female blacksmith. Even the strongest- 
minded of the advocates of woman's rights have not claimed for women 
the trade of a blacksmith. But here little girls from seven to nine years 
old are set to work, and kept at work as long as they can stand, hammer- 
ing at the anvil, roasting by the forge, blacked with soot, never seeing 
school-house or play- ground, but employed their whole lives making horse- 
shoe nails for a bare subsistence. Absolute Free Trade sets women and 
children to work at forge and mine and reduces wages to the lowest possi- 
ble standard ; and that is the system against which humanity protests, 
and with which Parliament, in spite of theories, finds it necessary to inter- 
fere. Fiee Trade, as ultimated in England, is the most debased ignorance, 
the most abhorrent cruelty, the most disgusting vice, and the most heart- 
breaking misery, that can be seen in any country, calling itself civilized 
and Christian." 



12 



RESUMPTION No. 1. 

In his first report to Congress, December, 1865, Mr. Secretary 
McCullough told that body that the currency was in excess, and 
that prices were too high ; that the former must be contracted and 
the latter reduced ; that the debt was burdensome and dangerous, 
and needed to be paid ; and that, to the end that he might be en- 
abled so rapidly to proceed in the work of payment as to complete 
it within thirty years, he desired to have appropriated to the dis- 
charge of principal and payment of interest an annual amount of 
$200,000,000. That done, he was of opinion that the day of re- 
sumption would prove to be not far distant. 

In his second report (December, 186G), after expressing great 
regret that Congress should, so far as regarded the non-interest- 
bearing portion of the debt, have limited his contractive powers to 
$4,000,000 per month, and that he should thus have been " pre- 
vented from taking the first important step towards a return to 
specie payments," he urged that for the present fiscal year his 
powers should be so extended as to enable him to cancel circula- 
ting notes at the rate of $6,000,000 per month, and thereafter at 
the rate of $10,000,000 per month until the whole should have 
been extinguished. These things done, he believed that we should 
be ready for resumption in July, 1868, if not even " at a still 
earlier day." 

The views thus presented had previously been given to the world 
in his Fort Wayne speech, made more than two years since. 
Throughout those years every efi"ort has been made to put a stop 
to exchanges of property for labor. From day to day the world 
has been assured that prices were yet quite too high ; that they 
must and would fall ; that those who now built ships or houses, 
furnaces or factories, would find that they had given for them far 
more than they then were worth ; and thus has the sword of Da- 
mocles been held suspended over the heads of our people until a 
paralysis has been produced that is scarcely less complete than 
were those which accompanied the financial crisis of 183T and 
1857. Purchases are now made only from day to day, or from 
hour to hour, none desiring to be caught with merchandise on hand 
when the day of final settlement shall have been reached. Prices 
fall steadily, but the lower the price the stronger is the belief that 
there is yet before us a still lower deep, and the more the desire to 
refrain from supplying even the most necessary wants until the 
lowest deep shall have been arrived at. Threats of early resump- 
tion having brought us to this sad condition, it is now, in sheer 
despair, suggested that we should almost at once take the great 
leap, making public declaration that at an early day the Treasury 
would be prepared to redeem with gold its obligations of any and 
every kind, and that from and after that day the banks would be 



required, on pain of forfeiture of their charters, to do the same. 
The Rubicon would then have been passed ; the lowest point would 
then have been reached ; men would then bep^ln again to buy and 
sell ; commerce would then become active ; mills and furnaces would 
then be built; and prosperity would then again become the order 
of the day. So, at least, we are assured by those journals which 
advocate the Secretary's policy, and most especially by some of 
those of New York and New England. 

The proverb, however, advises that you look before you leap, 
and that is what, for the benefit of our readers, we propose now to 
do, presenting for their consideration, to the best of our ability, 
an exact statement of the position at which, at the close of the 
second year of the contractive policy, we have arrived, and leaving 
to them then to judge for themselves how far it would be expedi- 
ent to take the extraordinary leap that, in accordance with all the 
past teaching of the Secretary and his friends, is thus proposed. 

The public debt is now, in round numbers, $2,500,000,000. Of 
this only $2,100,000,000 as yet bear interest, but to that amount 
there should this year be added $72,000,000, and next year $120, 
000,000, until at length in 18V0 the whole should draw interest 
payable in gold, and making demands upon the Treasury to the 
annual extent of $150,000,000. The present demand, admitting 
that resumption had now taken place, would be but $126,000,000, 
but to this would have to be added diplomatic expenses, mainte- 
nance of fleets abroad, and payment for "Walrussia, Samana, and 
other territories that have been or may be purchased, the whole 
making little if any less than $140,000,000, to be gradually in- 
creased until it shall reach $155,000,000, if not even $160,000,000. 

For obtaining the gold thus needed the Treasury is now wholly 
dependent on receipts from customs duties, the average of which, 
as shown by the Treasury report, but little exceeds forty per cent. 
To enable us to receive from that source the sum of $140,000,000, 
we need to import foreign merchandise to the declared extent of 
nearly $350,000,000. 

To this must now be added a sum sufficient to cover the under 
valuations, the smuggling, and the passengers' baggage, this last 
alone amounting to very many millions. By many, ourselves in- 
cluded, it is believed that these involve an additional hundred mil- 
lions, but we shall content ourselves with taking them at only 
$60,000,000, giving $410,000,000 as the annual amount of mer- 
chandise that must be imported to enable the Treasury to obtain 
from that source the gold required for enabling it to meet the gold 
demands upon it. 

Nearly the whole of our intercourse with Europe, and very 
much of it with the rest of the world, being now maintained by 
means of foreign ships, we need now to add to the above, for 
freights and passage money, not less than $10,000,000. It may 
be twice that amount, but we are content to place it at the one we 
thus have named, giving so far a total of $420,000,000. 



t4 

To tills must be added the expenses of our absentees, travelling 
and resident, sometimes estimated at $100,000,000. We, however, 
are satisfied to ])lace them at $60,000,000, by adding which to the 
amount above given, we obtain as payable abroad, §480,000,000. 

Adding next for dividends on stoclcs held abroad, and for inter- 
est on public and private debts, only $60,000,000, we obtain a 
total of §540,000,000 payable in foreign countries, and in gold. 
How is this vast demand to be met ? Let us see ! 

Exclusive of gold and cotton, our exports, valued in greenbacks, 
for the fiscal year 1866, amounted to $189,000,000 

For the second half of the present fiscal year they 

were $83,000,000. Taking the same amount for 

the first half, we have a total of 166,000,000 

It is little likely that those of the present year will be 

greater, but we are content to estimate them at 190,000,000 

Contraction having closed many of our cotton mills, while 
forcing very many of them to work short time, the domestic de- 
mand for the raw material has so far declined that the price has 
fallen to less than 18 cents, or about $80 per bale of 450 pounds. 

Of the last crop we ex])orted 1,216,000 bales, yielding, proba- 
bly, little short of $200,000,000. The present one, as now re- 
ported by the Bureau of Statistics, will give but 1,568,000 bales, 
of which we should retain, even with the present diminished con- 
sumption, 650,000. This would leave less than 1,000,000 for 
export, giving $80,000,000 as the amount to be added to the 
miscellaneous list, and making our total exports, gold excepted, 
$270,000,000. 

Converting this into gold, we obtain less than $190,000,000 with 
which to meet demands that, as has been shown, exceed $500,000,- 
000.* For the balance we must give either gold or bonds. As 
regards the first, however, the same influences are at work to pre- 
vent extension of mining operations throughout the centre, the 
west, and the south. Paralysis forces capital back to the com- 
mercial cities, and gold mines remain nnworked that under a 
different system would even now be yielding tens of millions. 
Coal and cotton, gold and iron, feel thus alike the benumbing 
effects of a ])olicy that to us appears the most vicious that has 
ever been proposed by any finance minister the world as yet has 
seen. 

Under such circumstances, what would be the value of a decla- 
ration on the part of the Treasury of its ability to resume pay- 
ment in specie of its obligations ? Would any sane man believe 
that it could do so for even a single week ? If none such could 
or would do so, could resumption have any effect other than that 
of distributing among private hoards the gold now hoarded la 

* It is positively asserted that the report above referred to is wholly 
incorrect, and that the cotton crop will exceed 2,000,000. Shoiild this prove 
to be the case, the addition in gold to be made to our exports may be 
$25,000,000, giving a total of $215,000,000. 



75 

Treasury vaults ? That done, to what quarter would the Secre- 
tary look for means with which to meet demands for interest ? 

This question is submitted in tlie hope that some of those who 
now so strongly advocate the Secretary's policy may be induced 
to explain how it is that, in their belief, resumption may be first 
attained and then maintained C. 



RESUMPTION No. 2. 

The Secretary's friends seem unwilling to exhibit the process by 
means of which, in their belief, resumption may be either attained 
or maintained. They do not explain how it is to be — the age of 
miracles being supposed to have passed away — that, in the face of 
an annual deficit in our transactions with foreigners which now 
counts by hundreds of millions, and that grows with each succes- 
sive year, we are to be enabled to retain among ourselves the 
produce of our mines with a view to resumption of the use of the 
precious metals. They have little relish for calculations other 
than those furnished by the Treasury, no two of which seem to be 
much in harmony with each other. They shriek "resumption," at 
the same time threatening that if the legislative authority shall in 
any manner interfere with the Secretary's plans, "the movement 
will be delayed at least by Executive interposition." It is thus 
threatened that if Congress sliall, as it certainly must, arrive at 
the conclusion that continuance in the policy of contraction can 
have no result other than that of repudiation, the President will 
interpose his veto, in the hope and belief, as we suppose, that he 
may be thus enabled to succeed in placing the loyal and the rebel 
debts on a level with each other. To accomplish this would cer- 
tainly please him much, and none are lalioring more to gratify 
him than are those professed friends of resumption, and professed 
opponents of Executive usurpation, by whom this threat has but 
now been uttered. How far Congress will find itself disposed to 
afford him such gratification we have yet to see. 

The New England States, as represented in Congress, are urgent 
for an early return to specie payments. AVhy ? Because, with 
little more than a twelfth of the ))()pulation, they have secured to 
themselves more than a tliird of the great money monopoly that, 
under the new banking law, has been created 1 Because, to those 
States, small as they are, there has been granted an average circu- 
lation of no less than seventeen millions 1 Because, the large 
amount of capital that has been there allowed to be invested in 
banking prevents necessity for the over-trading that exists in the 
less favored States of the centre, the south, and the west ! ]>e- 
cause the channels of commerce are there so abundantly filled with 
notes of every size as almost to annihilate demand for either legal 



T6 

tender notes or the precious metals ! Because, but very few mil- 
lions would suffice for supplying all their needs; and because those 
millions would, on the day of resumption, be at once obtained from 
Treasury vaults 1 Because, being creditor States, they desire that 
all existing claims shall be paid in gold, the commodity of highest 
value I Because, I)eing purchasers of wool, cotton, and other raw 
material, they desire that the agricultural and mining States may 
find themselves compelled to accept the lowest prices I For all 
these reasons the votes of eastern members are almost unani- 
mously favorable to the Treasury policy of contraction. 

Equally unanimous in their opposition to it are the people oc- 
cupying the vast Territory south of the Delaware and the Ohio and 
west of the Mississippi, fifteen millions in number, and likely soon 
to be thirty milliuns. Why ? Because, to their thirty States 
and territories, with two-ffths of our total population, there has 
been allotted but a ninth of the great money monopoly that now 
exists. Because, while the average circulation allotted to the little 
New England States is more than $17,000,000, that allotted to 
their States and Territories scarcely exceeds a single million ! Be- 
cause, by reason of the monopoly that has been created they now 
find themselves almost entirely dependent on legal tenders for 
machinery of circulation ! Because, to give them gold by means 
of which they should be placed upon an equal footing with the 
highly favored eastern States, would require more than thrice the 
quantity now in Treasury vaults 1 Because, even now, they gladly 
pay from two to five per cent, per month for the use of circulating 
notes issued by eastern banks, for the private profit of their stock- 
holders ! Because, with every step in the progress of contraction, 
the price of money tends to rise, and that of wool or cotton tends 
to falll Because, even now they find themselves ground as be- 
tween the upper and the nether millstone 1 Because, being debtor 
States, they prefer to pay in the commodity that was receivable at 
the date of contraction of the dobt I Because, being sellers of 
raw products, they do not desire to be thrown on the " tender 
mercies" of eastern traders, leaving to them to fix the prices at 
which they will receive those products. For all these reasons the 
people of two-thirds of the States and territories of the Union, 
rightly believing that the Treasury policy can have no result other 
than that of making them mere hewers of wood and drawers of 
water to their more favored brethren of the east and north, are to 
a man opposed to it. 

Before the war, with a banking capital of 85 millions, the New 
England States had a circulation of 34 millions. To-day, with 
145 of the one, they have 103 of the other— this latter having 
more than trebled in the short space of seven years. Thus well 
provided at home, they find themselves ready to dispense with 
Treasury notes. 

With an almost equal population and almost equally engaged in 
other than agricultural pursuits, Peausylvauia's share in the great 



money monopoly is but little more than a third as great, \\'hether 
as regards eitlier capital or circulation. Therefore is it that she 
is more dependent on the use of Treasury credit, and quite deter- 
mined to resist tlie policy of contraction. 

Before the war, Georgia had 16,000,000 of capital and half that 
amount of circulation. To-day, she is most graciously allowed to 
have two of the one and one of the other. 

Before the war, Missouri had nine of capital and eight of circu- 
lation. To-day, greatly growing as she is, she is most kindly 
permitted to have four of the former and two of the latter. Need 
we then wonder that her people, as well as those of Georgia, see 
in the Treasury policy nothing but absolute suI)jection to the will 
of eastern capitalists and utter ruin to themselves ? Most extra- 
ordinary would it be did they fail so to do ! 

The tendency towards resumption thus exists in the precise ratio 
of the presence of those substitutes for the precious metals which 
almost annihilate the demand for gold. On the other hand, the 
opposition to it exists in the direct ratio of such absence of those 
substitutes as makes those metals the almost exclusive medium of 
circulation. Such being the ease, the road towards specie pay- 
ments would seem to lie in the direction of jjlacing the centre, the 
south, and the west as nearly as possible in the same position with 
the eastern States, giving them notes of eveiy denomination, and 
thereby lessening the demand for gold. Directly the reverse of 
this, however, the Secretary insists that they shall now surrender 
the legal tender notes, and make almost exclusive use of gold and 
silver. Whence, however, are these to come ? Paralysis, caused 
by Treasury action, forbids development of their mining interests, 
and mines remain unworked that, under other circumstances, would 
furnish the supplies that are now so greatly needed. Thus is it 
that the Secretary is busily engaged in l)urning the candle at both 
ends, diminishing the supply of the very commodity by means of 
which, almost alone, he insists that the people of those numerous 
States and territories shall make exchanges of food for labor, of 
labor for cotton, cloth and iron. This maij be the road towards 
resumption, but to us it seems more like that which finds its end 
in repudiation. 

Study the Secretary's policy where we may, we obtain the same 
results. The seven-tLiirties make no demand for gold. Compound 
interest notes make none. Legal-tenders make none. That they 
may be enabled so to do, it is needed that the form of debt be 
changed, and that gold-bearing certificates, fitted for exportation, 
be issued in their stead. 

That is the work on which the Secretary is now engaged, his 
whole energies being given to the manufacture of bonds for Euro- 
pean markets. With each successive bond exported there arises 
a new demand for gold with which to pay abroad the interest. 
With each there is increased facility for importing cloth and iron 
that should be made at home. With each there is increased de- 



78 

mand for gold with which to pay the duties. With each there is 
a diminution in the product of oil and cotton sent to distant 
markets. 

In all times past it has been held that the road towards resump- 
tion lay in the direction of diminishin,;^ demand for the precious 
metals, while increasing the supply thereof. All Ihis, however, is 
to be now unlearned, the Secretary having discovered that the 
more the supply can Ijc diminished and the demand increased, the 
sooner shall we attain the much-desired end. It may be that it 
will thus be reached, liut if it shall be so, there will thus Ije fur- 
nished conclusive evidence that the age of miracles has returned. 

C. 



[From the National American.] 

INDUSTRIAL RECONSTRUCT 10 X OF 
THE SOUTH. 

Louisiana held its first grand State fair under conduct of the 
Mechanics and Agricultural Fair Association, on the 26ih No- 
vember, 18CG. "We have the report of its proceedings, including 
premium essays and addresses, and have read it with unmingled 
pleasure, not unfrequently heightened by surprise. One of the 
orators goes at large into what he styles " The causes which led to 
southern subjugation ; and the means by which the South may be 
restored to prosperity and power." On a rapid examination of 
statements and arguments, we Ond nothing said and nothing 
omitted that a picked representative of northern opinions could 
improve. He traces the conquest of the South to the superior 
economic policy of the North — to the difTerence of the industries 
of the two sections, from which resulted all the difference of power 
to make and maintain the war. Tlie hope of restoration he neces- 
sarily puts upon the frank acceptance of her situation by the South, 
and such change of industrial and commercial policy as shall make 
her self-supplying and self-sui)porting. In a word, she" must di- 
versify her productions, agricultural and manufacturing, after the 
model of the Northern States ; and she must educate her whole 
people, white and black, rich and poor, up to the point of quali- 
fying them all for their respective functions in society. Moreover, 
she must actively encourage the immigration of foreign mechanics 
and mariners, with the double purpose of making her own manu- 
factures, and securing the domination of the white race in the 
social and political systems. Of which last-named motive we 
need say nothing, for we care nothing about a side issue of this 
sort. Only let them do the right things, and then the things will 
take care of themselves, and of their political and social issues 



TO 

Altogether, it js with uncommon pleasure that wo find these 
people growing wise, as well as earnest, in reconstructing them- 
selves. Among the essays read at this Fair is a very brief one on 
" Raising Swine in Louisiana," by Judge Robertson, whose re- 
markable report upon the resources of Louisiana, made to tlie 
Legislature in January last, may have come under the notice of 
some of our readers. 

The points made by the Judge are substantially these : owing 
to the difference of climate hogs are at least doubly more prolific 
in Louisiana than in Ohio or Illinois; always producing two lit- 
ters in the year against one in the colder North, and bringing 
them to maturity with great certainty. Owing to the same cause 
they need no housing in the winter, and can find roots and grasses, 
green and fresh, for pasturage all the year. The average yield of 
the sweet potato there is 200 bushels to the acre, and twice as 
many can be raised. This root is found to make pork equally as 
fast as the like weight of corn ; giving an average of 200 to the 
potato against an average of thirty bushels of corn, as the yield of 
food ; the culture of the former being at the same time much less 
expensive than of the latter. Barley there averages fifty bushels 
to the acre, while at the North and West it is but little over 
twenty ; it is far superior to corn in giving body and frame to the 
bog, and it comes so early in the season that it may be used in 
raising the young pigs, and preparing the stock for fattening. 
Louisiana produces, besides potatoes and barley for bog feed, a 
semitropical abundance of peas, pumpkins, peanuts, squashes, 
peaches (!) and Jerusalem artichokes. The Judge concludes by 
saying that he believes hog raising to be far more profitable for 
that region than either cotton or sugar planting; that they have 
every advantage over the Northwest in the competition ; that they 
have salt better and cheaper ; that their hams and bacon are equal 
to any in the Union ; that they abound in the woods used for 
packing; and, being situated at the mouth of the Mississippi, 
they have the immense advantage of a short and cheap inland 
transportation ; and, finally, that they can and will supply the 
world's markets with this great article of export.. 

It is really pleasant to the head and heart of a sound political 
economist to see the South thus turning her back upon the causes 
of all her troubles, and setting the example to the Northwest of a 
sound and healthy system of industrial enterprise ; entering upon 
a course of diversified production which, of itself, will compel the 
Northwest to adopt a like progressive and secure economic jiolicy. 
Cotton having lost its provinces, corn will be obliged to live at 
home. For both, the system of hazardous dependence upon dis- 
tant regions is broken up forever. Let all parties take notice and 
prepare. 



LEMr'l2 



